Gillies and Ors v Health Administration Corporation and Anor

Industrial Relations Commission of New South Wales in Court Session

CITATION : Gillies and Ors v Health Administration Corporation and Anor [2003] NSWIRComm 243 Matter Number IRC 5497 OF 2000 KEVIN GILLIES Applicant HEALTH ADMINISTRATION CORPORATION First Respondent WESTERN SYDNEY AREA HEALTH SERVICE Second Respondent

Matter Number IRC 5498 of 2000 KENNETH DARVALL CROCKER Applicant HEALTH ADMINISTRATION CORPORATION First Respondent NORTHERN SYDNEY AREA HEALTH SERVICE Second Respondent

PARTIES : Matter Number IRC 5499 of 2000 GREGORY JOHN DRIVER First Applicant KEITH HORNSHAW Second Applicant HEALTH ADMINISTRATION CORPORATION First Respondent SOUTH WESTERN SYDNEY AREA HEALTH SERVICE Second Respondent

Matter Number IRC 5500 OF 2000 CHRISTOPHER BENTLEY Applicant HEALTH ADMINISTRATION CORPORATION First Respondent WENTWORTH AREA HEALTH SERVICE Second Respondent FILE NUMBER: IRC 5497, 5498, 5499 and 5500 of 2000 CORAM: Schmidt J CATCHWORDS : Unfair contracts - NSW Health Service - private use of motor vehicles - contract of employment unilaterally altered by employers - amount of deductions from salaries increased without employees' consent - operation of employers' policies considered - effect of agreement with unions considered - right to do so upon giving notices considered - unfairness of 1998 policy - contracts found to be unfair - contracts to be varied - parties to confer on appropriate terms of the variation to each contract and resulting money orders - interest - respondents' to bear applicants' cost as agreed or assessed LEGISLATION CITED : Health Services Act 1997 Industrial Relations Act 1996 Bourke Air Charter v Easton (2001) 109 IR 443 Brown v Rezitis (1970) 127 CLR 157 Burdett-Coutts and Ors v Hertfordshire County Council [1984] IRLR 92 Burgess & Ors v Mount Thorley Operations Pty Limited (2002) 115 IR 13 Gough v Gilmour Holdings v Caterpillar (No 13) [2003] NSWIRComm 26 Mitchforce v Industrial Relations Commission & Ors (2003) NSWCA 151 CASES CITED : Newton v Goodman Fielder Mills Ltd (1997) 81 IR 227 New South Wales Nurses' Association v South Western Sydney Area Health Service (1994) NSWIRComm 147, 8 December 1994 Nordby v Barclays Australia Investment Services Limited and Anor (1993) 53 IR 319 Rigby v Ferodo Ltd (1998) ICR 29 Riverwood International Australia Pty Ltd v McCormick (2000) 177 ALR 193 Stevenson v Barham (1977) 136 CLR 190 Westfield Holdings v Adams (2002) 114 IR 241 HEARING DATES: 05/19/2003; 05/20/2003; 05/21/2003; 05/22/2003; 05/22/2003; 06/26/2003 DATE OF JUDGMENT: 08/12/2003

APPLICANTS: Mr PJ Newall of counsel SOLICITORS: LEGAL REPRESENTATIVES: McClellands

RESPONDENTS: Mr MJ Kimber SC with Mr R Reitano of counsel

JUDGMENT: - 77 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION

Matter Number IRC 5497 of 2000 GILLIES v HEALTH ADMINISTRATION CORPORATION OF NEW SOUTH WALES AND ANOR Application under section 106 of the Industrial Relations Act 1996

Matter Number IRC 5498 of 2000 KENNETH DARVALL CROCKER v HEALTH ADMINISTRATION CORPORATION OF NEW SOUTH WALES AND ANOR Application under section 106 of the Industrial Relations Act 1996

Matter Number IRC 5499 of 2000 GREGORY DRIVER & KEITH HORNSHAW v HEALTH ADMINISTRATION CORPORATION OF NEW SOUTH WALES AND ANOR Application under section 106 of the Industrial Relations Act 1996

Matter Number IRC 5500 of 2000 CHRISTOPHER BENTLEY v HEALTH ADMINISTRATION CORPORATION OF NEW SOUTH WALES AND ANOR Application under section 106 of the Industrial Relations Act 1996 JUDGMENT

1 These applications brought under s106 of the Industrial Relations Act 1996 ('the Act'), were heard together by consent. Complaint was advanced by the applicants about the circumstances in which the respondents increased the amount of the deductions made from their salaries, in relation to private use of their employer's motor vehicles. It was alleged that the respondents' alteration of the policies upon which these deductions were based, without the consent of the applicants, was both contrary to the terms of their contracts of employment and unfair, having regard to representations earlier made to each of them.

2 The respondents' case was that the applicants were each entitled to private use of a motor vehicle, in accordance with the terms of the applicable policy. The policy was determined by the Health Administration Corporation ('HAC') and bound the various Area Health Services which employed the applicants. The policy gave the respondents discretion to alter the basis upon which contribution was made by each applicant to the cost of private use of the car. Accordingly, the policy was altered over time by the HAC. Alterations in the basis upon which that contribution was calculated, ultimately to total recovery of the cost of private use of the vehicle, was the subject of a dispute between the respondents and various unions in 1999. That dispute appears to have been settled, in part at least, on the basis about which complaint was here made. It was argued that no relevant unfairness of the applicants' contracts had thereby been demonstrated.

3 The applicants each gave evidence. The respondents called evidence from Mr Kenneth Barker, Chief Financial Officer of New South Wales Department of Health. Various documents were also tendered.

4 The circumstances of each applicant were somewhat different. It is necessary to deal with them separately. The relief claimed was, however, similar. In Mr Gillies' case, for example, the summons sought: (1) An order declaring that the contract whereby each of the Applicants perform work for the Second Respondent ('the Contract') is unfair;

(2) An order declaring that the collateral contract or arrangement ('the Arrangement') between the First Respondent and the Second Respondent so far as it affects or is said to affect the Contract is unfair;

(3) An order declaring void ab initio the Contract insofar as it permits the Second Respondent to vary the Contract, or permit the Contract to be varied, so as to reduce, or permit to be reduced, the levels of remuneration paid to the Applicants for performing work under the contract;

(4) An order declaring void ab initio the Arrangement insofar as it permits the First Respondent to vary the Contract, or cause the Contract to be varied, so as to reduce, or permit to be reduced, the levels of remuneration paid to the Applicants for performing work under the Contract;

(5) An order varying the Contract ab initio so as to include express terms that; (a) the remuneration payable to the Applicants under the contract may not be reduced during the term of the Contract;

(b) if the Contract is varied by the Second Respondent, or caused to be varied by the First Respondent, so as to reduce the remuneration payable to the Applicants under the Contract, the Second Respondent shall pay to each of the Applicants an additional sum each pay period representing the sum by which each the Applicant's remuneration has been reduced by the effect of such variation. (6) Further or in the alternative, an order declaring the Contract void ab initio insofar as it permits the Second Respondent to vary the basis on which payments to be made under the Contract by the Applicants, or alternately sums to be deducted from the total remuneration payable to the Applicants under the Contract, with respect to the private use of motor vehicles the Applicant, to be so made on any basis other than as a percentage of the salary payable to the Applicants under the Contract;

(7) An order varying the Arrangement ab initio so as to include express terms that the remuneration payable to the Applicants may not be reduced by effect of the Arrangement;

(8) Further or in the alternative, an order declaring the Arrangement void ab initio insofar as it permits the First Respondent to vary, or cause to be varied, the basis on which payments are to be made under the Contract by the Applicants, or alternatively sums to be deducted from the total remuneration payable to the Applicants under the Contract, with respect to the private use of motor vehicles by the Applicants, so as to permit such payments or deductions to be made on any basis other than as a percentage of salary payable to the Applicants under the Contract;

(9) An order that the Second Respondent pay to each of the Applicants such sum of money in connection with the Contract and/or Arrangement so varied as may arise from the variations effected to the Contract or Arrangement;

(10) Further or in the alternative, an order that the First Respondent pay to each of the Applicants such sum of money in connection with the Contract or Arrangement so varied as may arise from the variations effected to the Contract and/or Arrangement.

(11) An order that the Second Respondent, or alternately the First Respondent, pay to each of the Applicants interest on such sum of money as is ordered to be paid to each of the Applicants at rates in accordance with s94 of the Supreme Court Act , from 27 April 1998.

(12) An order that the Second Respondent, or alternatively the First Respondent, or alternatively the First and Second Respondent, pay the Applicants' costs of the proceedings herein.

(13) Such other orders as the Court may see fit to make to provide relief to the Applicants.

5 The money orders sought for each of the applicants was: i. A sum equivalent to the difference between the sum paid by way of salary to each Applicant in the month before the coming into effect of Department of Health Circular 98/107 and the sum paid in salary to each Applicant in the month after the coming into effect of that Circular, multiplied by the number of complete months since the date of the coming into effect of that Circular:

ii Interest to each applicant on the total sum payable to each applicant under the Contract and/or Arrangement as varied:

6 Mr Gillies was employed by the Western Sydney Area Health Service (WSAHS), as the Deputy Director Human Resources and Risk at the time of the hearing. He was formerly employed by the Chamber of Manufactures of New South Wales. In 1990, he was initially approached about a position at WSAHS by Mr Alan Delaney, the Area's Human Resources Director. The remuneration being offered was lower than that which Mr Gillies was then earning. He declined the approach. He was approached again about the position, which had been reorganised, so that the salary was higher. The salary was still lower than that of Mr Gillies' current position. It was fixed by reference to the then Hospital Secretaries (State) Award, now the Health Managers (State) Award. Discussions as to provision of a motor vehicle, to make up the difference, ensued.

7 No reference was made in these discussions to the policy applicable to private use of Departmental vehicles. The end result was that Mr Delaney was only able to offer Mr Gillies private use of a vehicle to and from work, but promised to pursue full private use further, after his appointment. In re-examination Mr Gillies explained that he would not have accepted the position, without the provision of a car, given his other options. The discussions between he and Mr Delaney over a period of several months proceeded on that basis.

8 The letter of offer made no reference to provision of a motor vehicle. Mr Gillies accepted the offer of employment. As promised, he was provided with a motor vehicle for use to and from work and was not required to make any contribution for this private use of the vehicle. Prior to his employment Mr Gillies was told nothing of the HAC policy providing for contributions by employees for private use of a car.

9 Mr Delaney did not pursue the question of Mr Gillies' wider private use of the vehicle, despite repeated assurances that he would do so. Mr Gillies was frustrated about the lack of progress and finally, in 1992, put a proposal that his remuneration be increased, his title altered and that he be given full private use of a vehicle, on the basis of the Departmental policy 90/13, ('the 1990 policy'). The proposal was accepted and Mr Gillies provided WSAHS with an authorisation for deductions of $692 per annum to be made from his salary, on a fortnightly basis. The form authorised the deduction of 'the standard Department of Health rates (as varied from time to time) for the private use of a motor vehicle allocated to me by the Hospital Unit/WSAHS'.

10 The policy provided both for members of the Senior Executive Service ('SES') and other senior employees, such as Mr Gillies. So far as Mr Gillies (and the other applicants) were concerned the policy relevantly provided: 2.0 Other Senior Executives 2.1 Other Senior Executives of Area Health Services and Hospitals, who perform an executive function (as distinct from clinical, administrative, service functions), and whose salary is above that applicable to Grade 12 Clerk, Public Service (Currently $53,458 p.a.), may be offered the allocation of a motor vehicle for private use.

2.2 Fleet needs of the individual organisation will determine whether there is a vehicle allocated on a business/private basis to each such officer, with fleets not to be expanded to cover any allocations under this Clause.

2.3 An officer holding a position for which a car is provided is responsible for the management of the car as follows:- (a) Ensure that the vehicle is regularly serviced and maintained. Service and maintenance should be arranged through the officer responsible for the Hospital's Transport Services.

(b) Make arrangements for proper garaging of the car or other suitable protection.

(c) Be responsible for the vehicle being kept clean and tidy inside and outside and polished when required.

(d) Report to the responsible officer of the Hospital to which the officer is attached any damage, however slight, at once with a view to repairs being effected at the earliest opportunity.

(e) Officers involved in accidents must comply with all legal and insurance requirement such as obtaining particulars of parties involved and notification of police and the appropriate officer in the organisation.

(f) Officers using the vehicles are responsible for the payment of any insurance excess if damage occurs whilst the vehicle is being used for private purposes. 2.4 Annual registration, insurance, maintenance and running costs including petrol will be paid by the organisation. NRMA membership will also be paid if this is in accord with the Hospital's policy. The officer will contribute at a minimum rate determined annually by the Director-General. The contribution may be made through a fortnightly deduction from salary. Current minimum contributions are as follows:- Salary in excess of $70,000 - $940 p.a. Salary $60/70,000 - $712 p.a. Salary to 60,000 - $618 p.a. Revenue received should be offset against expenditure in the General Fund. 2.5 Cars are provided for official use but the holder of the position may use the car for private purposes subject to the following restrictions:- (a) The car is not to be driven by any person other than the officer of his/her nominee, being one other member of the officer's household. This nominee must have a current State driver's licence to be eligible to drive the car. Other members of the household are not permitted to drive the car.

(b) Vehicles will be available for the Hospital's use on a daily basis. This availability takes precedence over private use.

(c) The Hospital Chief Executive Officer has the right to require any vehicle to be available for use of other staff for official purposes.

(d) Optional equipment such as child restraints may be installed. However, the alterations or additions will be at the officer's expense and subject to the express permission of the delegated officer at Clause 5.

(e) All fitted items must comply with and be used in accordance with the vehicle manufacturer's recommendations.

(f) Approval must be given by the delegated officer at Clause 5 for the car to be used by an officer during any leave period subject to a limit of 6 weeks per annum. Cost incurred for petrol and oil during the leave period will be the responsibility of the officer. 2.6 Other considerations are:- (a) Written Acceptance There must be a written acceptance by the officer acknowledging receipt of the policy statements and accepting the conditions and obligations under the terms of the policy. (b) Trip Recording

All vehicles must carry a trip record to monitor usage. Drivers of vehicles covered by this policy must record details of all occasions when the vehicle is used for official purposes. (c) Implications for Taxation Fringe Benefits taxation legislation places responsibility on the employer to pay tax on the imputed tax benefit of an official vehicle used for private purposes. The Department has accepted that in the terms of the legislation, it is considered as an employer and no tax liability will be borne by the officer. It should be noted that at this time hospitals are exempt from F.B.T. (d) Parking During official use the car shall be parked at a location convenient to the needs of the Hospital at no cost to the Officer.

11 In cross examination Mr Gillies explained that Mr Delaney had not told him about this policy. He had discovered its existence for himself after his employment commenced. He had made his proposal to the WSAHS, because of Mr Delaney's inaction in relation to the promised private use of the vehicle. While Mr Gillies was aware that the policy provided for the Area to use his vehicle during business hours, this had not been put to him prior to his employment and was not his experience during his employment.

12 The amount of the deduction provided under the 1990 policy was increased by HAC from time to time in following years, a matter of complaint by Mr Gillies, who had understood that the contribution would remain at some nominal amount, in the order of $10 per week. There had been minimal percentage increases up to 1998 and for a variety of reasons, including the senior position which he held in the Area, Mr Gillies had made no formal complaints about these increases at the time. He accepted that they were within the percentages of the increases which he would have to pay over time. Nevertheless, he regarded them as inconsistent with the basis upon which he had been recruited in 1990.

13 Mr Gillies' evidence made clear that he did not understand the basis upon which the increases were made. Evidence given by Mr Barker in cross examination explained this. The reviews had regard either to CPI increases, or to adjustments in charges made to SES officers.

14 In late 1997, Mr Gillies heard of a proposal to alter the basis upon which employees made contributions to motor vehicle costs. In 1998 he learnt of a new policy, under which the HAC proposed to recover from employees having access to private use of fleet vehicles, the total cost of such use. Mr Gillies objected to this change. The issuing of this policy led to industrial disputation and was withdrawn by the HAC. A second policy was later issued. It, too, was withdrawn and negotiations ensued between the HAC and various unions.

15 A further policy, 98/107 ('the 1998 policy') eventually emerged in November 1998, as the result of these negotiations. Mr Gillies was a member of the Health and Research Employees Union ('HREA') and provided it with information about the matters in contention, during the negotiations. When he learned of what was being discussed, he and a number of other senior employees remained opposed to the new basis for payment by employees being proposed and the resulting substantial increases, given the terms of their contracts and the basis upon which they had come to be employed by the respondents.

16 Mr Gillies took advice on his position and on 24 September 1998, he sought leave to intervene in proceedings before the Commission for himself and 31 other affected officers, in matter IRC No 3845 of 1998. He regarded this as the only avenue available to pursue his concerns. When Mr Gillies appeared, the parties to the dispute announced, however, that agreement had been reached between them. The proceedings were on that basis concluded by his Honour Justice Maidment. The 1998 policy was finally published on 25 November and then implemented, despite the objections of Mr Gillies and various other senior employees. Mr Gillies' view was that he should have been treated differently by the respondents, given the terms of the contract which he had entered many years previously.

17 What the terms of the agreement reached with the unions was not entirely clear on the evidence. There was evidence of a report made by the HREA to its members, which included advice that 'charges for parking of official vehicles contained in 98/56 to be withdrawn' and 'The Association has been successful in getting the Department to the point of halving their original proposal as well as extending it over a much longer time frame. The Circular will also stipulate that these rates will remain in place, unless changed with the consent of the parties. This is a significant achievement in its own right, as it effectively prevents the Department from unilaterally changing the provisions for private use of motor vehicles. Therefore with this in mind, the Association will be recommending that the latest proposal be accepted.'

18 The 1998 policy was issued after the agreement was reached. It does not entirely accord with the HREA's advice to members. Mr Gillies, however, accepted that it contained concessions negotiated with the unions, compared to what the HAC had earlier proposed to introduce, namely recovery of a contribution to all costs of acquisition and running of a vehicle from employees who were given private use.

19 The 1998 policy dealt with three categories of employees. Members of the SES; employees whose remuneration was not covered by an award, who were to be treated in the same way as the SES and other employees, such as the applicants, 'who require the use of an official motor vehicle during the normal course of their duties', who might be offered private use of a vehicle.

20 The 1998 policy relevantly provided: 3.0 Other Employees 3.1 Other employees who require the use of an official motor vehicle during the normal course of their duties may be offered the allocation of a motor vehicle for private use. When the offer is made it must clearly indicate whether the private use extends to:- a. To and from place of work b. Other after hours and general week-end running c. Travel during annual leave 3.2 Fleet needs of the individual organisation will determine whether there is a vehicle allocated on a business/private basis to each such officer, with fleets not to be expanded to cover any allocations under this clause. 3.3 An officer holding a position for which a car is provided is responsible for the management of the car as follows:- a. Ensure that the vehicle is regularly serviced and maintained. Service and maintenance should be arranged through the officer responsible for the Area/Hospitals' Transport Services. b. Make arrangements for proper garaging of the car or other suitable protection. c. Be responsible for the vehicle being kept clean and tidy inside and outside and polished when required. d. Report to the responsible officer of the Area/Hospital to which the officer is attached any damage, however slight, at once with a view to repairs being effected at the earliest opportunity. e. Officers involved in accidents must comply with all legal and insurance requirements such as obtaining particulars of parties involved and notification of police and the appropriate officer in the organization. f. Officers using the vehicles are responsible for the payment of any insurance excess if damage occurs whilst the vehicle is being used for private purposes. 3.4 a. Annual Registration, insurance, maintenance and running costs including petrol will be paid by the organisation. NRMA membership will also be paid if this is in accord with the Area/Hospital's policy. b. Officers are required to pay for all fuel used when they take a vehicle on annual leave. Fuel payments whilst on leave should be by means other than use of official fuel cards, unless for fleet management purposes the delegate at clause 6 approves otherwise. c. Payment of tolls is not part of the calculated annual contribution by officers. Any tolls incurred during private travel must be met by the officer concerned. 3.5 a. Officers permitted private use are required to contribute at a rate determined by the Director-General from time to time. b. Rates effective from 1 December 1998 will be:- - up to and including 15000 private kilometres per annum - $1263 p.a. - over 15000 private kilometres per annum - $1669 p.a. c. The rates in future will be varied from time to time based on the SES running cost rates for six cylinder motor vehicles as determined by Premiers Department. The variation of rates will apply from the date designated by the Premier's Department for SES officer vehicles. d. The formula for assessment of the rate will be 15000 or 25000 kms times the applicable running cost rate per kilometre. e. Current rates are somewhat less than the rates under the formula, and there will be a progressive transition to the full rates as follows:- (i) 1 July 1999 60% (ii) 1 July 2000 80% (iii) 1 July 2001 and thereafter 100% f. For indicative purposes only, the assessment of the rate for 1 July 1999 would be 15000 or 25000 x 14.7 x 60% = $1323 or $2205. This would be provided that the rate of 14.7 cents per kilometre is current as at 1 July 1999. g. Notwithstanding 3.5 (a) to (f) above, where specific methods of charging for motor vehicle use for particular classifications of employees have been approved by the Director-General since November 1997, those approved arrangements and methods of charging for the particular classifications of employees will prevail over the charges and methodology specified in this policy. 3.6. Private travel, in general, includes travel to and from home to the normal place of work, but does not include: a. Kilometres travelled which are associated with emergency on call arrangements or the security of the vehicle. b. Kilometres travelled which are associated with an officer performing duties in the field and the officer wishes to proceed to his/her home after completion of duty in preference to returning to his/her normal place of work, or where he/she will proceed to duty directly from home on the following day at a location away from his/her normal place of work. 3.7 The number of private kilometres travelled can be determined in one of two ways:- a. By the actual kilometres travelled. b. By the extrapolation to an annual basis of the number of private kilometres travelled in a representative continuous 12 week period. This calculations to be performed annually, and kilometres travelled during periods of leave are to be added separately. The Chief Executive Officer is to decide which option to be utilised. 3.8 Cars are provided for official use but the holder of the position may use the car for private purposes subject to the following restrictions:- a. The car is not to be driven by any person other than the officer or his/her nominee, being one other member of the officer's household. This nominee must have a current State driver's licence to be eligible to drive the car. Other members of the household are not permitted to drive the car. b. Vehicles will be available for the Area/Hospital's use on a daily basis. This availability takes precedence over private use. c. The Area/Hospital has the right to require any vehicle to be available for use of other staff for official purposes. d. Optional equipment such as child restraints may be installed. However, the alterations or additions will be at the officer's expense and subject to the express permission of the delegated officer at Clause 6. e. All fitted items must comply with and be used in accordance with the vehicle manufacturer's recommendations. f. Approval must be given by the delegated officer at Clause 6 for the car to be used by an officer during any leave period subject to a limit of 6 weeks per annum. 3.9 Other considerations are:- (a) Written Acceptance There must be a written acceptance by the officer acknowledging receipt of the policy statements and accepting the conditions and obligations under the terms of the policy. (b) Trip Recording All vehicles must carry a trip record to monitor usage. Drivers of vehicles covered by this policy must record details of all occasions when the vehicle is used for official purposes. (c) Parking During official use the car shall be parked at a location convenient to the needs of the Area/Hospital.

21 The results of the changes introduced by the 1998 policy, included for Mr Gillies that his contribution altered from the salary related basis of recovery in the 1990 policy, then at a level of $1,267 per annum, to total recovery of the running costs calculated by reference to a kilometre based calculation. The resulting increases were introduced gradually to 100% recovery from 1 July 2001, at a level of $3,687 per annum. The contribution levels were calculated by reference to two levels of usage, under 15,000 kilometres per year and over. Mr Barker explained in cross examination that this did not reflect actual distance travelled by the employee, but travel of 15,000 kilometres for the first level of charge and 25,000 kilometres, for the second.

22 Mr Gillies' proceedings and a number of others, were brought under s106 as a result of the introduction of the 1998 policy. All but the five applications dealt with in this judgment, are no longer being pressed.

23 Deductions from Mr Gillies' salary were made on the lower basis provided in the 1998 policy, after he executed another deduction authority form on 1 February 1999, on a without prejudice basis, noting that he intended to commence these proceedings. The authority form noted that if his private use of the vehicle exceeded 15,000 kilometres in any 12 month period, Mr Gillies would be obliged to pay the above 15,000 kilometre rate. This, in fact later occurred because his use exceeded 15,000 kilometres and there was a retrospective adjustment made by the respondents, by deduction from his salary. Mr Gillies explained that he understood that the deductions made from his salary would continue, even if he wasn't provided with a car for a period. This followed from the annual basis of the kilometre charge upon which the deductions rested under the 1998 policy.

24 Mr Gillies also said that he had not compared the cost of the car, if he had purchased one, to the contributions which he was making under the 1998 policy. He had sold his car when he obtained private use of the respondents' vehicles and had expected that he would continue to have access to that benefit.

25 In cross examination, Mr Gillies accepted that he could, at any time, have given up private use of a car and the result would have been that no deductions would then have been made from his salary for private car use. In re-examination he explained, however, that he regarded private use of a car to be a part of his contractual remuneration package. He also explained that the fortnightly salary paid to him had been reduced on numerous occasions, as the result of the deductions made by the respondents having been increased.

26 Mr Driver had been employed as the Human Resources Manager of the South Western Sydney Area Health Service ('SWSAHS'), since July 1989. Prior to accepting the position, he discussed with Mr Colin Froud, the then Area Director of Corporate Services, his ability to accept the position, given the increased travel time between his home and workplace. (Mr Driver lives at Hurstville Grove and the office is located at Liverpool.) Mr Froud offered Mr Driver private use of a car to travel to and from work, without charge. This was a deciding factor in Mr Driver's acceptance of the position. While his travel time would increase, there would be no increased costs as a result. He regarded such private use of the cars as an important part of his contract of employment, when he accepted the job.

27 In 1990, Mr Driver received an offer that he could take up full private use of the car, for payment of the fee prescribed by the 1990 policy. The fee was based on his salary. The policy provided for increases, but he did not expect that other than increases flowing from salary increases, there would be other substantial increases to the charge, or changes in the basis of the charge. He accepted the offer.

28 In 1998, when the Department introduced full cost recovery for private use of the car, the increases were so great that Mr Driver could not afford to maintain the private use of the car, which he returned. In cross examination, he explained that he had then incurred higher mortgage repayments, which he could not manage when the car rates jumped significantly. He proposed to SWSAHS that in future, he would travel to work using public transport, other than on those occasions when he was required to attend another location at the beginning or end of a day. Such travel was accepted by SWSAHS as involving business use of the vehicle.

29 When the new policy was withdrawn in 1998, Mr Driver resumed private use of the car. He became aware of the negotiations between the HREA and the HAC and opposed what was being discussed, given his circumstances. Mr Driver was not a party to those discussions, but was one of the officers who instructed Mr Gillies to appear in the Commission to intervene in the proceedings before Justice Maidment. In cross examination, he agreed that the HREA had sought input from its members, including him, as to the issues being discussed. He advised HREA of his views and concerns. He considered at the time that HREA was representing his interests and was aware of a vote of members about HREA's proposed approach, although he was not present at the meeting.

30 Mr Driver was aware that the 1998 policy contained concessions for example in relation to car parking fees earlier proposed. This had, however, not affected him personally.

31 Mr Driver continued using the car for private purposes until July 2001, when the rates increased to $3,675, his private use of the vehicle exceeding 15,000 kilometres. He again relinquished the car and commenced travelling to work by public transport. In his note to SWSAHS advising of this decision, he pointed out that given the availability of public transport, he could not arrive at work before 8.30am, after two hours of travel and would have to leave shortly after 5pm, to face similar travel time. It was later suggested to him by Mr Craig Turner, Acting Director Business Services, that Mr Driver should limit his private use to under 15,000 kilometres. He adopted that course, so that he now does not have full private use of the car. Even so, the costs incurred have increased significantly. The under 15,000 kilometres rate moved to $2,205 per annum in July 2001 and then over to rate $3,675 per annum.

32 In cross examination Mr Driver agreed that his salary had increased over the years for various reasons including regradings and higher duty allowances. He also accepted that over time the car fees had moved from something in the order of 1.6% of his salary to about 2.4%. He explained, however, that under the 1990 policy this reflected unlimited use of his vehicle, while under the 1998 policy, his private use was limited to under 15,000 kilometres.

33 In cross examination, Mr Driver also confirmed that he was not aware of the basis upon which the fee was increased from time to time and he accepted the fairness of making a contribution to the cost of private use of the vehicle. He assumed that increases would not be substantiated however and expected that they would be linked to CPI movements. He agreed that he had not been given any assurances that this would be so. He also explained that under the 1990 policy if a car was taken on annual leave, employees were required to pay for fuel and oil. If the car was not taken, deductions from salary ceased for the period of the leave.

34 In cross examination, Mr Driver also agreed that it was always a matter for him, if he wished to relinquish private use of a car, in which event he would keep the contributions he would otherwise make. He explained however, that the result was that a mutual benefit for he and the Area, was lost. Given his increased travel time, his ability to work additional hours, outside normal office hours, was reduced.

35 Mr Driver regarded these changes as resulting in unilateral reductions of his contractual terms and conditions of employment, to which he had not consented. In re-examination he explained that he needed the car in order to perform his work for the Area and he regarded it as a tool of trade. He confirmed, in cross examination, that his complaint concerned the consequences of the 1998 policy, not the increases in contributions which had flowed from the 1990 policy. He was aware of and had accepted the terms of that policy. He also accepted that some increase in rates from 1998 would have been reasonable. He did not, however, accept that the basis upon which rates were calculated in the 1990 policy could be changed, as they were in the 1998 policy.

36 In re-examination Mr Driver confirmed that while the 1998 policy required written acceptance of the policy by an officer, such acceptance had not been sought of him, nor provided.

37 Mr Hornshaw was employed by SWASHS as the Director Physical Resources, in November 1997. He had worked for 32 years with the Department of Public Works ('DPWS') as a project manger. He applied for his position, seeking improved remuneration and working conditions.

38 He discussed his application on a number of occasions with Mr Froud, then the Area's Deputy Chief Executive Officer. The position was advertised as 'Salary: $66,000-$74,000 p.a. plus motor vehicle & superannuation". Mr Froud explained that the remuneration package included private use of a motor vehicle supplied by SWSAHS, with a contribution rate of about $12 per week. In a further discussion as to the type of vehicle available, Mr Froud confirmed that the rate was about $25 per fortnight. The other aspects of the applicable policy were not discussed with him.

39 Mr Hornshaw understood that he was being offered private use of a motor vehicle equal to a Holden Acclaim for a nominal contribution amount. This was an important issue for him, because the contribution rates were lower than those applying at the DPWS. The increased net salary gain was a major attraction in accepting the SWSAHS offer. The letter of offer confirmed that: 'I would like to offer you the position of Director Physical Resources with remuneration at the rate of Health Services Manager's Enterprise Agreement Level 5, salary will be in the band of $66,000.00 to $74,000.00 commencing at $74,000.00 (with a 9% salary increase imminent), an official motor vehicle will be available for both business and private use subject to contribution for private use in accordance with the agreed contribution rate. Conditions of employment will be in accordance with the South Western Sydney Health Services Manager's Enterprise Agreement and employment will be subject to satisfactory criminal record check.'

40 On commencement Mr Hornshaw's salary was some $80,000. After he commenced his new employment, under the 1990 policy, the actual motor vehicle contribution rate turned out to be $50.50 per fortnight. While Mr Hornshaw accepted this doubling of the rate he had been advised of, he did not understand that the basis of the contribution could be altered without his consent, or that it could be increased, other than for perhaps nominal CPI increases, consistent with prior increases which he assumed would continue. In re-examination he also explained that it had never been suggested to him that the car could be taken from him, for any period.

41 Mr Hornshaw also explained that when employed, he assumed there was a policy applicable to car use. He later learnt of the 1990 policy and read it. He also understood that it was a policy unique to the Department of Health, which had a high requirement for motor vehicles, given a policy called ambulatory care, which sought to ensure that patients were kept out of hospitals because of the high cost involved. This had led to clinical staff administrating many health services in patient's homes, so as to reduce costs to the community.

42 While Mr Hornshaw saw in the policy that continual allocation of a car to him depended on availability of a fleet vehicle, he expected that he would always have access to a vehicle, given the terms of his contract.

43 Mr Hornshaw also did not expect that his remuneration would be decreased, without his consent. In December 1997, Mr Hornshaw completed a deduction authorisation form, which did not itself authorise any increases in the contribution rate.

44 Mr Hornshaw, too, became aware of the various policy changes proposed by the Department in 1998. The result for him was that his contribution rates increased from $63.97 per fortnight in December 1998 (around $1,400 per year), to $96.60 in July 2000 and $140.86 in July 2001 (around $3,800 per year). His salary had increased to $94,000 in that time. In cross examination he explained that he was not a member of the HREA and was not aware of where the revised rates had come from. Mr Hornshaw had also calculated the percentage increases. His salary had increased by 18%, or 4.5% per annum on average. The motor vehicle charge had increased by 184% over that time. Initially the charge represented some 1.875% of his salary. Now it was about 4.25%.

45 Mr Hornshaw believed that he had been lured into accepting his position on the basis of an agreed remuneration package, which was later altered to a lesser amount, without his agreement. He also believed that the purchasing power of his net remuneration had decreased, as a result of the increased car contributions and having regard to CPI adjustments. There had been a disproportional increase in vehicle rates.

46 In cross examination, Mr Hornshaw also accepted that under the policy, he could return the vehicle, if he wished. Until he had read Mr Barker's affidavit it had not occurred to him that he could just return the car. He had accepted employment on the basis of access to a motor vehicle, as part of his package. This was important to him, because he did not own a car. It had not occurred to him that he might wish to do so. He found this aspect of the policy hypocritical, because no compensation was offered for such a benefit being forfeited. Mr Hornshaw also explained that he had pursued this claim because of the dramatic change in policy imposed by the respondents. He resisted the 1998 policy as a result. Returning the car would not have been much good to him. He accepted, however, that he had decided it was better to keep the car and pay the higher charge, than to return it. He believed himself entitled to the car and entitled to resist the respondents' increase in deductions.

47 In 1997, Mr Bentley was employed by the Wentworth Area Health Service ('WAHS') as the Contract Manager/Director Area Quality Unit. Prior to June 1997, he had been employed by NSW Health. In cross examination he confirmed that prior to this employment, he was aware of the existence of the 1990 policy, but he had never read it.

48 While being interviewed for his position at WAHS, his travel arrangements were discussed. Mr Bentley resides 70km from his workplace, which was an issue for him in considering whether he could accept the position. The Area wanted to be assured that the travel would not be too onerous for him. Mr Bentley had the impression that they wanted to do what they could, to ensure he took the position. He was told by Mr Hamilton, the then CEO of WAHS, that he would be offered a car as a part of his package, at the low rates of contribution contained in the 1990 policy, which were very attractive and based on salary level and that the car would probably be a Commodore. In cross examination, Mr Bentley explained that the specifics of the policy were not discussed.

49 The offer of car was confirmed by Mr Hamilton in a later discussion, when Mr Bentley was offered the job. He was also told that the contribution rates were under review at the time, but that Mr Hamilton did not foresee any major changes and that, in any event, some sort of alternative arrangement could always be reached. Mr Bentley accepted Mr Hamilton's word.

50 This was an important aspect of the offer for Mr Bentley and was referred to in his acceptance of the offer made to him, where he said: 'As discussed with you a motor vehicle will also be provided in accordance with Department of Health Circular No: 90/13.'

51 Mr Bentley had not seen the 1990 policy prior to his employment. He later signed a deduction authority, which referred to a contribution rate of $1,026 for private use of the vehicle, which noted that Mr Bentley had read and agreed to abide by the 1990 policy. In cross examination, Mr Bentley explained that he had by then read it, but he was not concerned about the details. Mr Hamilton had discussed the rates and the current review with him as well as the important parts of the policy.

52 He did not however, understand that the Area could require his car for other official use, when he was using it. He accepted Mr Hamilton's assurances that "Even if it does turn out to be a great impost, we will look after you.' This was what he had been concerned about.

53 Mr Bentley explained that the link of the cost of the car to his salary was an important part of what enticed him to the position, as well as the understanding that increases in the cost would be marginal. While he was aware that the rate was being reviewed, there was no consideration at the time that the basis on which the contribution was calculated would be changed.

54 Mr Bentley also later became aware of the proposals to alter the policy in 1998. He raised his concerns with Mr Barker and Mr Thompson of the HREA, both of whom he knew personally. He did not regard the HREA as representing his position adequately. He informed them that the charges originally proposed would make it cheaper for him to purchase a unit at Penrith, rather than to drive there weekly. He also pleaded with Mr Barker that the respondents' managers should be looked after and not abused. Mr Thompson did not make Mr Bentley aware of the parameters of the negotiations. He was dissatisfied with the HREA approach.

55 Mr Bentley was one of those officers who later instructed Mr Gillies to intervene in the proceedings before Maidment J. He later informed WAHS of his intention to challenge the changes to his contract and also authorised increased deductions from his salary, on a without prejudice basis.

56 Mr Bentley believed that the provision of a motor vehicle in accordance with the inexpensive rates provided by the 1990 policy, were integral conditions of his employment. It had been represented to him that those rates would increase marginally with salary increases and if that were not to be the case, other arrangements would be made for him. If he had been made aware that his contract could be unilaterally altered to reduce his remuneration, he would not have accepted the position, or would have insisted on an arrangement which would have precluded such a unilateral reduction.

57 Mr Bentley travelled in excess of 15,000 kilometres per annum and under the 1998 policy his deductions had increased to $3,675 per annum by July 2001. The 1998 policy had also been revised in relation to car parking charges. As a result, he was now required to make payments for parking his car at work, at a rate of about $20 per week; even though the car was on occasions used by others, as well as himself, for work purposes while there.

58 Mr Crocker was employed as a Management Accountant by the Northern Sydney Area Health Service ('NSAHS'). He was first appointed in June 1994 to the position of Management Accountant the Royal North Shore Hospital and Community Health Service. His letter of appointment provided: 'Your remuneration package consists of a salary of $56,383 a fully maintained private use vehicle and employer contributions to the superannuation fund you are eligible to join/maintain membership.'

59 After his employment commenced, Mr Crocker was informed that an error had been made and that he was obliged to make a contribution to the cost of the car of $618 per annum. At that point, he felt that he had no choice but to accept. He did not regard it as fair, but the amount was tolerable. In 1998 this increased to $996 and in 1997, when his salary increased to over $70,000, the contribution increased to $1,356. Mr Crocker was given no choice as to these increases, he was aware from the policy that they could occur and he was simply advised of them, from time to time.

60 Between 1995 and 1997, an enterprise agreement applied to Mr Crocker. It did not affect the contributions he was making for private use of a vehicle. It was possible under the enterprise agreement to take a vehicle on a salary sacrifice basis. This did not apply to Mr Crocker, because of the car with which he was already provided. In May 1997, the agreement was brought to an end and the provisions of an award applied to his employment thereafter.

61 Mr Crocker had never understood the basis upon which the contributions he was paying were calculated, but understood that the small percentage increases which had occurred in the past would continue. When the enterprise agreement had been brought to an end in 1997, it had been on the basis of an understanding that '…no Senior Manager was disadvantaged in the process.' In cross examination he explained that what he meant by 'small percentage increases' was increases equivalent to award increases. In his view, increases in contributions under the 1990 policy, on two occasions of 14% and 15%, were too high.

62 In 1998, Mr Crocker became aware of the new policy proposed by the HAC. He was directed to execute a new authorisation form for deductions, which was worded to enable further automatic increases to be charged to him. Mr Crocker executed this form in December 1998, indicating that he would require less than 15,000 kilometres private use, with an estimate of 5,000 business use by the car as a pool car; 4,900 kilometres travel to and from work; 5,000 kilometre after hours running and 3,000 kilometre during periods of leave.

63 Mr Crocker did not understand that his remuneration could be so reduced unilaterally, or that the basis for the contributions which he had made, contrary to the terms on which he had been employed, could be so altered without his consent. He had accepted reversion back to award based employment on the basis that he would not be disadvantaged, but later found that his remuneration became considerably lower. Had he been aware of what was proposed, he would have insisted on making an arrangement so that his remuneration could not be reduced unilaterally. In cross examination, he explained that he did not believe that award increases could be taken back by the respondents by way of increasing car deductions. His experience had been that increases in car deductions had led to decreases in cash payments, which he received from time to time. In his view, this represented a drop in his remuneration.

64 Mr Crocker was not a member of the HREA, but was one of the officers who instructed Mr Gillies to intervene in the proceedings before Maidment J.

65 In cross examination, he agreed that he understood that he could always return the car, but had not chosen to do so. If he did, he would thereby lose the benefit of the car. In re-examination, he explained that the amount of the car contributions, would not have enabled him to acquire a car.

66 Mr Barker's evidence went to the history, bases and reasons for the HAC policies here in question. He explained that the 1990 policy was developed in order to formalise a variety of arrangements which had been brought into existence by different Area Health Services, for non-SES staff. The amount of the contribution was initially fixed at three levels, for salaries in excess of $70,000 ($940 per annum), $60/70,000 ($712) and to $60,000 ($618).

67 In cross examination Mr Barker explained that there was a Senior Executive Forum, where health service chief executives and other senior employees got together with the Director General, on a monthly basis. There was a discussion at the forum about the anomalies which existed in relation to private use being made of motor vehicles. Minimum contributions were developed, the view taken being that those earning larger salaries, were able to make a greater contribution to the cost of using government vehicles for private use. Area CEO's were free to require higher contributions, but had no authority otherwise to depart from the policy, except with approval of the Director General. Mr Barker was not aware of any such approval having been granted. Compliance with the policy was a matter considered in HAC audits.

68 The original rates were based on information as to running costs, which were then scaled down. The view taken was that vehicles being funded by tax payers were being used and public criticism could be levelled, as to inappropriate use of such vehicles, if no contribution was made by the employees for such use.

69 The contribution rate was increased in later years by the Director General. Those increases had regard either to increases affecting charges made to SES officers, or to movements in the consumer price index, not by reference to increases in vehicle costs. In 1996 the three levels were reduced to two, salary to $70,000 and salary in excess of $70,000. In February 1997, those rates were increased to $1,026 and $1,356 per annum respectively.

70 In December 1997, a draft circular was published by the Director General, giving notice of a new basis for the charges made for private use of vehicles. The concept was that there should be full cost recovery in relation to private use of official motor vehicles, as a result of an emerging gap between the charges made for the SES and what was being recovered under the 1990 policy, which was salary related, not cost based. The proposed cost was 40.3 cents per kilometre. This covered both running costs and other costs, including the cost of purchase of the vehicle.

71 This decision resulted from consideration of the cost of the large number of people having access to government vehicles for private purposes, including travel to and from work and the real cost of providing these vehicles. It was thought to be inappropriate for highly paid people to have access to new vehicles, for private purposes, at minimal contributions. The approach taken was to recover from employees something more reflective of the cost of private use of the vehicle.

72 The 1997 announcement was rescinded by the Director General in January 1998, after representations from a number of unions. Meetings of Area Health Service representatives were arranged, so that the policy initiative could be reviewed. The Director General's announcement said, in part, that '…a fair and equitable method of charging in respect of private usage of official motor vehicles' would be determined.

73 A new policy was announced in circular 98/56 in June 1999, to take effect immediately, proposing rates of $2,326 per annum for under 15,000 kilometres travelled and $2,988 for over 15,000 kilometres. A dispute was then notified to the Commission by the HREA and the HAC undertook to refrain from implementing the policy, until discussions took place. Discussions with the HREA and other unions ensued and agreement was reached, although Mr Baker was not aware of the details of the agreement in relation, for example, to car parking.

74 As a result the 1998 policy was issued in November and implemented in December 1998. The new policy involved two rates, for under or over 15,000 kilometres travelled per annum ($1,263 and $1,699 respectively). The rates were based on the SES running costs for a six cylinder vehicle, including a component for fuel, tyre servicing and repair costs - 14.7 cents per kilometre. Costs of vehicle purchase, annual registration or insurance were not included. 100% recovery of these running costs was introduced over time. 60% as at July 1999, 80% as at July 2000 and 100% as at July 2001. The rates since then have increased to $2,205 and $3,675 per annum. The running costs which are recovered under the policy have regard to the rate published by the Premier's Department for SES officers' use of a six cylinder vehicle. On one occasion the rates decreased, in line with decreased costs.

75 Mr Barker explained that the lower kilometre charge reflected the HAC's acceptance, that the vehicle allocated to a non-SES officer had, in the first place, to be a part of the Health Service's pool of vehicles and had to be made available for business as well as private use, either by that officer, or another person working in the Health Service. It was accepted that the cost of acquiring the vehicle was a cost which the Health Service had to bear, even if the non-SES officer didn't want the vehicle for private us. It was on that basis that it was decided that only running costs were to be recovered.

76 In cross examination, Mr Barker accepted that the 1990 policy had envisaged that in order for the respondents to act fairly, they would have to follow their own policies. Mr Barker had not read the applicant's affidavits, but he was aware of cases where Area Health Services had provided private use of vehicles without charge, after the 1990 policy was established. His view was that this appeared to be a breach of the policy, without HAC knowledge. Mr Barker was not aware that the HAC had informed the Commission in the 1998 dispute proceedings, that there would be a case by case analysis of such situations. Nor was he aware as to whether such an analysis had been conducted. He expected that internal audit processes would pick up such situations and he expected that appropriate steps to correct departures from policy would then be taken.

77 Mr Barker also accepted that the 1990 policy made it mandatory that there be written acceptance by individuals accepting the terms of the policy and acknowledging receipt of it, as a matter of fairness to individuals. He agreed that access to private use of a vehicle required both approval by the chief executive and individual acceptance of the policy. The HAC expected that such acceptance would be obtained from individuals. How a policy was implemented was, however, a matter for each Area Health Service. Individuals would have to understand the cost of the vehicle to them and agree to their wages or salary being adjusted accordingly and the conditions applying to the vehicle supplied. He also agreed that if this was not done, then the policy was not put into effect.

78 Mr Barker agreed that the 1998 policies were introduced without prior consultation with the persons affected, even though the way in which charges were to be calculated had changed substantially. There was consultation with Health Service Chief Executive Officers and nominated senior staff and later various unions, which led to the abandonment of the idea of full cost recovery from employees. Mr Barker was not aware of individually affected employees having been asked to accept the changes finally introduced in the 1998 policy.

79 Mr Barker also explained that the 15,000 kilometre benchmark chosen had regard to tax office fringe benefit tax rates and other benchmarks, for ease of administration. The idea was that the charge should reflect the cost of kilometres travelled, irrespective of earnings. This had led to increases of up to 200% in the charges made to employees.

80 Mr Barker also explained that the 1998 policy was designed, in part, to close the gap between what SES officers were being charged for private use of vehicles and what other officers were being charged, which was regarded as anomalous. In 1998, SES officers were being charged 40.3 cents and others between 1/10th and 1/14th of that sum, for a similar vehicle. He agreed that at the time the SES was created, salaries were increased by between $40,000 to $60,000 over award rates, which included a sum to allow motor vehicles. Their rates now ranged from between $125,000 to over $300,000. The salary range for officers such as the applicants, were from $70,000 to the high 90s.

81 In 1990, Government had a policy that other than SES officers, employees were not to have access to government vehicles to drive to and from work, but in Health, there were a number of employees who were in breach of the 'potential Premier's Department circular'. It was accepted that 'SES fully costed rates' could not be introduced by the HAC in those circumstances and that was why the 1990 policy was developed, to introduce some contribution by employees, which recognised these longstanding practices. Area CEO's were arguing at the time that the private use of vehicles assisted in retention of staff and provided better security for vehicles, rather than being garaged in Health Service compounds. The contribution by employees also made 'good financial sense', and assisted in looking after the vehicle, in its own sense.

82 A substantial difference in payment between SES and non-SES officers remained under the 1998 policy. The rates now moved with SES rates published by the Premier's Department, for over and under 15,000 kilometres travel of a 6 cylinder vehicle. They were still less than full market rates for the cost of running a car, although Mr Barker accepted that under the 1990 policy, the savings had been much greater for employees.

83 Mr Barker's evidence was that if the cost for any employee became too great, under the policy they were free to return the vehicle. He accepted, that some positions had been advertised as being for a certain salary and a car. Whether provision of a car was a benefit of an individual's employment, in his view would depend upon 'how it was put to them when they accepted their employment contract.' Mr Barker was not aware as to whether any individual was in such a position. He accepted, however, that if a car was returned, the individual lost the benefit of its use. Whether they had lost a benefit of their employment, would depend upon whether they had been told of the departmental policy, which provided for movements in rates at the Director General's discretion.

84 Mr Barker also gave evidence that salary packaging for Heath Service employees had been introduced in January 2002. This meant that like SES officers, other employees, including the applicants, now had the option of paying for running costs on a salary sacrifice basis. This allowed such employees to pay such running costs on a pre-tax, rather than post tax, basis like the SES. Mr Barker also explained that while running costs for employees such as the applicants do not contain a component for fringe benefits tax, for SES officers there was such a component. The tax office had a tax free $17,000 FBT threshold. Area Health Service had 'deductible recipient status under the tax laws, which permitted no payment of FBT, provided salary sacrifice arrangements were kept under $17,000, grossed up'. The result was that it was now more beneficial for employees like the applicants to pay for their vehicle running costs, on a salary sacrifice basis.

85 Mr Barker was aware that despite the attitude of the unions, individual officers remained opposed to the 1998 policy. He was not aware of what level of consultation the respondents pursued with those employees, before implementing the policy.

86 Mr Barker also confirmed that there were a number of different Area Health Services who charged employees parking fees, at differential rates. This mainly occurred where 'there's a commercial opportunity to generate a charge for visitors and staff because there's no off-street parking available and there is a limited demand for the market. So, it's one of those economic issues about market demand and all those charges, depending upon how the structure is - if there's a car park operator involved, flow back to the Area Health Service, and its their responsibility'.

87 Mr Barker was not sure whether such charges were made of employees who were required to bring to work an Area Health Service vehicle of which they had private use, to make the car available for general use by other employees, during work hours.

88 When asked about the fairness of such a charge, Mr Barker's view was that it depended 'upon how the actual car park arrangement is configured and what sort of modelling has been done in terms of the level of subsidisation and how the operating costs of it are determined'.

89 Mr Barker also accepted that the 1998 policy fixed two flat annualised rates for running costs, which were aligned to the SES running cost rate. He agreed that if an employee was paying the under 15,000 kilometres rate, but was travelling for less than 15,000 private kilometres per year, the employee was paying for more than they were using. The same result flowed in relation to the over 15,000 kilometre rate, which was calculated by reference to 25,000 kilometre travel. If less than 25,000 kilometres was travelled privately, the employee paid for more private kilometres than were used. Mr Barker explained that: 'The principle in 98/107 if what we agreed administratively as the best solution to avoid from the individuals' points of view and Health Services substantial administrative requirements which clearly were implicit in the circular that came out in December 1997.'

90 Mr Barker agreed that the 1998 policy had the capacity to permit the Director General to approve arrangements different to these in the policy; administratively the respondents could accommodate such arrangements. The parties' respective cases

91 The case as opened for the applicants by Mr Newall of counsel was that each application concerned a contract which remained on foot. The contracts had become unfair, as the result of the respondents' conduct. In the case of the Area Health Service involved, as a party to the contract and in the case of the HAC, as the result of it being deemed to be the employer for certain purposes by statute, and because it had involved itself in each contract.

92 The result of the respondents' unfair conduct had been that each contract had been unilaterally altered to the applicant's detriment, with a quantifiable reduction in remuneration resulting in each case. The reduction was neither minor, nor fair, having regard to the terms of the original contract and representations made to each applicant. Some had been induced to enter their contract by representations which had not been honoured.

93 The case was not advanced on the basis of a breach of the Truck Act provisions of the legislation, but it was submitted that the effect of what had been done involved a breach of s118 of the Act. The respondents had held out employment on the basis of a salary and certain benefits, including private use of a car. When the deductions made from salary for such use had unilaterally been increased, the salary had been reduced, as had the benefits of each package. This was pursued as an unfairness, not in those proceedings as a breach of s118. The rationale underpinning that section, nevertheless, illustrated the unfairness. The same submission was advanced in relation to s119. No penalties were, however, sought.

94 It was also submitted that the decisions taken by the respondents amounted to fraud at common law. The two respondents having agreed to increase deductions made from the applicants' salaries and then effecting that agreement, by virtue of their positions as paymaster. While the sums involved to date were not large, the unfairness continued.

95 In final submissions it was argued that the evidence had showed that each of the applicants had had his contract of employment unilaterally altered to his detriment by the respondents. Justice required the resulting unfairness to be brought to an end, by variation of each contract. Money orders representing the full amount of the applicants' wages diverted to the respondents' benefit, should follow by way of money order. The variation should also ensure that in future, such unfairness could not again be imposed upon the applicants.

96 It was argued that the evidence had demonstrated relevant unfairness of each contact, ab initio, and as it had operated. The respondents' unfair conduct under each contract had also been demonstrated.

97 The evidence showed that each applicant was entitled to remuneration comprising salary, superannuation and private use of a vehicle. In some cases, Mr Crocker for example, employment was offered on the basis of a salary and a car. Only after the offer was accepted, was the applicant required to make a contribution for its use. The result was that neither the promised car, or salary were provided. Such misrepresentations rendered the contract unfair. (See Nordby v Barclays Australia Investment Services Limited and Anor (1993) 53 IR 319 at 315.)

98 In other cases, Mr Hornshaw for example, was told of a contribution rate of $12 per week, but required in fact to pay $25.

99 The evidence showed a failure by the respondents to inform the applicants of the existence, or terms of the 1990 policy. The evidence showed a practice of either commission or omission by the respondents. At the least there was no system in place to ensure that attention was drawn to the terms of the policy. It was unarguably unfair that hidden terms of a contract could be relied upon, to the financial detriment of an employee.

100 The policy contained a mandatory requirement that employees provide written acceptance of the policy. The evidence showed that this was not adhered to. This, too, infected the contracts with unfairness.

101 Even in those cases where the existence of the policy was revealed, assurances were given that any changes in the contribution rate would be modest. This was Mr Bentley's case. Such assurances were not adhered to either.

102 The policy sought to retain a discretion in the Director General to review the amount of the contribution. Even so, the applicants were entitled to rely on the manner in which the charges had been levied. A unilateral alteration to the entire basis upon which they were calculated, was not comprehended in the policy, particularly when considered in conjunction with how it had operated at the time the contracts were entered.

103 The result of the decision to alter the basis upon which contributions were recovered from the applicants, was a reduction in their remuneration. The decision was made and implemented by the respondents as paymaster. It was submitted not to be open to the respondents to agree as between themselves, that each applicant, a third party, would be deprived of money to which they were entitled under their contracts. This was a conspiracy to defraud at common law and unfair. The unilateral reduction of the three rates of contribution to two, in 1996, introduced without any consultation, clearly demonstrated this unfairness, as did the changes proposed in 1997 and those introduced in 1998.

104 The basis of the charges imposed by the respondents were also unfair. The vehicles in question were used by the respondents for business purposes. Despite this, they imposed flat charges upon the applicants, irrespective of the private use made of them. As was Mr Barker's evidence, the provision of the vehicles, even with the charge imposed by the respondents, was a benefit to the applicants. The respondents had acted to erode the value of that benefit, so as to render the contracts unfair.

105 The unfairness of the contracts was increased when the 1998 policy was introduced. The charges made increased steeply, even though the increases were phased in. The result was to reduce each applicant's remuneration and decrease the value of each applicant's remuneration package, as a whole.

106 It was no answer to assert that the actual dollar sum of the charge did not decrease the actual dollar sum of the salary paid, from the start to the end of a year. Even if this was mathematically correct at a particular point in time, the respondents could not rely upon award increases to shield them from the result that the applicants did not receive the whole benefit of such an increase, when the respondents unilaterally increased the vehicle contributions. It was unfair to deprive the applicants of salary increases to which they were entitled, by imposing these additional charges as a matter of discretion.

107 The usage charge introduced in the 1998 policy was, itself, unfair. The evidence showed that it was not a true usage charge and an applicant who travelled 16,000 kilometres per year, for example, was charged for 25,000 kilometres use. This was arbitrary and unfair, especially when the applicants were required to keep log books of their private use.

108 The change in policy also sought to introduce charges on the same basis as the respondents applied to SES officers. This, too, was unfair, when regard was had to the fact that such officers earned up to $300,000 per year, and the evidence that SES officers paid these costs in pre tax dollars.

109 The charge was also had a component for maintenance and tyres. The result was that the applicants were paying those costs for the respondents' use of the car.

110 The evidence showed that the respondents were aware of the opposition of a number of individual employees, including the applicants, to the changes they proposed to introduce. They did not, however, consult those individuals, all senior managers in their employ. The policy envisaged that an employee's written consent to the policy would be obtained, yet the respondents failed to obtain such consent. The dismissal of the applicants' concerns was also conduct which rendered the contracts unfair.

111 The 1998 policy was also unfair because it permitted the applicants to be charged for parking the vehicles, even though they were obliged to have them at work for the respondents' purposes. Mr Bentley was already meeting such charges. The result was that he was being charged a fee so that the respondents could have use of the vehicle. This appeared to be contrary even to the agreement reached with the HREA in 1998.

112 The evidence also showed that it was now mandatory to include private use of the respondents' motor vehicles as part of employees' salary packaging arrangements, contrary to s119 of the Act. This, too, showed the unfairness of these contracts. While employees were not obliged to salary package at all, this further emphasised the unfairness being imposed.

113 That the respondents negotiated the 1998 policy with the HREA did not provide an answer to the unfairness demonstrated on the evidence. Individual contracts cannot be altered as the result of negotiation between the HREA and the respondents. The respondents were aware that the applicants opposed the agreement and did not, in any event, adhere to the agreement reached.

114 The unfairness was further demonstrated by the breach of s118 and s119 of the Act, inherent in the respondents' policies. The respondents required the applicants to make the contributions they had determined for a benefit which they had held out as being a part of the applicants' remuneration package.

115 Detailed submissions were also advanced as to the position of each individual applicant, which I will not detail. The orders sought were compensation for past loss, together with an order for future use of a vehicle at no cost to the applicant, or in the alternative in some cases, on the basis of a sum calculated by reference to the 1990 policy. If no future relief was to be made as a matter of discretion, money compensation, at least for a period of 5 years should be ordered.

116 The case as opened for the respondents by Mr Kimber SC, appearing with Mr Reitano of counsel, was relied upon in final submissions. It was then submitted that none of the applicants had either commenced employment or taken new positions on 'the basis of salary sacrifice arrangements involving motor vehicles'. They were not offered the option of a salary or a lower salary and vehicle. Rather, they were each given an option to access health system cars for private use, on terms contained in the 1990 circular, as varied.

117 Representations that increases in contributions for such private use would be small, or not substantial, suffered from difficulty in relation to conflicting terms of the representations relied upon and no evidence of any departure from them. The applicants ignored that they were on notice that there would be increases over time, that they could cease using the vehicles if the contribution was too high and that the use was always dependent upon the vehicles being available.

118 It was also submitted that the arrangement always permitted the respondents to vary or terminate it, provided sufficient notice was given. This was so, even if the right to private use of the vehicles had become a contractual term. The applicable policies required the applicants to agree to the terms of private use offered; that the size of the fleet would not be expanded to provide any applicant with a vehicle and such a vehicle had always to remain available for use by the respondents.

119 Under the 1990 policy the rate of contribution was determined annually by the Director General. Such determination continued under the 1998 policy, based on SES officer running cost rates determined by the Premier's Department. The basis upon which the Director General would determine such rates was never the subject of agreement with the applicants, that was always a matter of discretion. No promises were held out that rates would remain at particular levels, or increase in particular ways, or that they would always be calculated as percentage of salary.

120 The rates and policy altered in various ways over time, without complaint, even though the basis for the changes were not disclosed to the applicants. The bona fide introduction of a user pays system involved no departure from the policy. The 1998 policy was agreed with various Health unions, including the HREA. The result was lower charges than the respondents had earlier proposed. The result had minimal impact. In Mr Gillies' case, for example, his contribution rate in 1992 was 1.5% of salary ($825 per annum and a salary of $54,911) and 1.6% of salary in 1997 ($1,026 per annum and $65,881 salary) and 2.4% in 2001 when the full user pay scheme had been phased in ( $2,025 and $90,927).

121 The result was for those travelling less than 15,000 kilometres there had been a very small increase and for those travelling over 15,000 kilometres, no substantial increase. In Mr Driver's case, for example a change from 1.22% in 1990 ($618 per annum and a salary of $50,497), compared to 4% in 2001 ($3,675 and a salary of $91,740). Expectations of modest increases had thus been met.

122 It was also submitted that the reasonableness of a user pay system was not sought to be attacked. The claim was based on the idea that the respondents were estopped from moving away from the original basis upon which the rates were set, whatever that was. The applicants had been on notice of these changes since June 1998. If the respondents had the right to withdraw private use of a car, as they did, they could undoubtedly alter the basis upon which they were provided, by giving reasonable notice. That had been given and the relevant union had agreed to the changes.

123 Those said to have made representations to the applicants did not have the express, implied, or ostensible authority to vary the terms of the respondents' policy. The arrangements had not operated unfairly and so the applicants could only succeed if they could show that the rates were objectively unreasonable. That could not be shown. The relief claimed would, in any event, not be granted.

124 In final submissions it was conceded that the Court had jurisdiction to entertain the claims made. It was argued, however, that the case finally pressed demonstrated a significant departure from the claims made and the way in which the applicants had opened their case. Each summons confined the money orders sought to what had flowed from the 1998 policy. No earlier orders were available.

125 It was argued that the Court would not permit the applicants to expand their case in closing, given that no leave to amend the claims had been sought or granted and because the applicants had acquiesced in the way in which rates were assessed under the 1990 policy, without complaint.

126 The case as opened for the applicants relied upon the alleged unilateral reduction in the applicants' remuneration and alleged representations in each case. In closing, unfairness in matters such as terms, operation and conduct were alleged, as well as non-compliance with policy, failure to consult, unfairness in determination of the contribution, imposition of parking charge and salary sacrifice were raised. These submissions should be disregarded, having no relevant connection with the case as pleaded or opened. This was fundamental, as a matter of procedural fairness (Bourke Air Charter v Easton (2001) 109 IR 443 and Burgess & Ors v Mount Thorley Operations Pty Limited (2002) 115 IR 13 at PP40-41). In particular, the applicants should not now be permitted to depart from their money claims.

127 It was also argued that the applicants' submissions did not fairly, or accurately, reflect the evidence. Each case had to be determined on its own merits and the Court should not be distracted from the evidence relevant to each case.

128 Each applicant had not entered a contract made up of a salary, superannuation and private use of a vehicle. Mr Driver and Mr Gillies had originally only been entitled to private use, to and from work. Each applicant, perhaps with the exception of Mr Crocker, had been provided with a car, known to be subject to the terms of the 1990 policy. Even he had soon been made aware of the circular and accepted the error made in not adverting to it earlier. Mr Gillies' position bore no relationship to this situation, particular given the term of his own proposal.

129 That some of the applicants had not signed written acceptances of the policy, belied their understanding of it. The absence of such acceptance was, in any event, not crucial to a determination of the fairness of the policy. This was a distraction, not pleaded in the summons.

130 All applicants were aware of the Director General's discretion as to the rate of contribution and no-one disputed the bona fides of the exercise of the discretion.

131 The applicants' cases were that they had an unconditional contractual right to a free or cheap car, which fairness dictated should continue whilever their contracts of employment continued. Such rights had not been established on the evidence. The contractual term established, at least in the cases of Mr Gillies, Mr Driver and Mr Crocker, was a term to the following effect: 'You may have, at your election, access to an Area motor vehicle for full private use on such terms as may be set by the Health Administration Corporation or the Director General of Health from time to time.'

132 The Court must determine what the contractual term was. It was not specified in the summonses. If the right to use of a car was not contractual, it could only have arisen from an arrangement, which the respondents plainly had a right to alter or vary, upon the giving of notice. (New South Wales Nurses' Association v South Western Sydney Area Health Service (1994) NSWIRComm 147, 8 December 1994).

133 The alterations introduced by the 1998 policy were contemplated by the express, or implied, contractual terms. There was nothing unfair about one party to the contract having the right to vary the conditions upon which a particular benefit is to be granted, especially in this case, given the statutory power to determine employees' wages and conditions, residing in the HAC under s115 of the Health Services Act 1997.

134 The summonses did not seek to challenge this aspect of the contract, which was first raised in closing submissions. Nor had there earlier been any complaint about the reduction in salary bands from 2 to 3 in 1997, or in the basis upon which the kilometre charges were calculated.

135 The case finally advanced ignored the negotiations successfully conducted with the unions and invited the Court to draw no inference that the 1998 policy must be fair, because the unions had agreed to it.

136 The evidence showed that all the applicants accepted that the cost of private use of the vehicle would increase over time. At the highest, they had a belief or hope that such increases would only be modest. There was no evidence that they had relied upon such beliefs, to their detriment.

137 It was also submitted that CPI adjustments was an untenable basis for the money claims made. The evidence showed no agreement or understanding that the rates would be adjusted on such a basis. On at least two occasions the rates were adjusted at rates higher than CPI adjustments. The claims so pressed, also ignored the agreement reached with the unions.

138 No unfairness could be found, given the evidence that the applicants were still gaining private use of the vehicles at a very cheap price; the recognition by the health unions that agreement was preferable to arbitration, which was likely to lead to full cost recovery; while contribution rates had increase by 145% to 185% over time, this still represented a small percentage of salary; percentage increases in the rate was, in any event, irrelevant, given the absence of representations as to what the rates of contribution would be; the real measure of fairness was that the applicants had never been called upon to make unreasonably high contributions, having regard to salary and the value of the benefit.

139 The evidence showed that there had been no reductions in the applicants' salary or remuneration. They each chose to access a private motor vehicle, by making the appropriate contribution from time to time. The choices available to employees were illustrated by Mr Driver's circumstances. The applicants could not ignore the increases in their salary over time, or the conditions upon which private use of a vehicle was provided. Salary increases had far exceeded increases in contributions.

140 It was inappropriate and improper to allege a conspiracy to defraud the applicants. The respondents had obligations to deal properly with public property. These claims were not made in the pleadings and should be rejected out of hand.

141 Nor had allegations as to lack of consultation been made out. Mr Driver accepted that the HREA had represented him in the negotiations. Other applicants did not, probably because the HREA did not achieve what they hoped for. The agreement reached with the HREA bound all of the applicants, given ss115(5) and (6) of the Health Services Act 1997. The respondents were entitled to rely upon the agreement.

142 Detailed submissions were advanced in relation to the evidence in each case, which I will not outline, but have taken into account. The evidence did not show that any applicant was influenced to take up an offer of employment, having regard to the level of salary offered and the discussions and agreement reached in relation to private use of motor vehicles. None of the applicants had been offered a salary and free, or cheap, use of a car forever. Even if they were, the necessary unfairness would not have been demonstrated on the evidence. Mr Barker's evidence as to the original purpose for the introduction of the 1990 policy was relevant in this respect.

143 If the Court took the view that any relief should be granted, it should not 'readily succumb to a pressure to exercise its residual jurisdiction merely because jurisdiction has been established, or the respondents would add, some unfairness has been identified' (Mitchforce v Industrial Relations Commission & Ors (2003) NSWCA 151.) The High Court in Stevenson v Barham (1977) 136 CLR 190 also cautioned the Court as to exercising 'its 'enormous' power 'appropriately'.

144 The applicants were senior executives in the public sector who had been given access to tax payer funded motor vehicles, at cheap rates. This obviated completely, the need for them to own a vehicle if single and the need for a second vehicle, if married. It also obviated the need for them to find or borrow money to acquire a six cylinder Commodore. Had they been obliged to make contributions on a user pays basis, their contributions would have been significantly higher. Common sense dictated that the applicants would take advantage of private use of a car on the terms being offered. Even though contributions under the 1990 policy were a 'pittance', they still had access to a very good deal.

145 The Commission would not exercise its discretion in a case where the complaint was that an extremely cheap deal had been converted into a cheap, or reasonable, one. Mr Barker's evidence made clear that it was never appropriate for public sector executives to have access to taxpayer funded motor vehicles for free private use. The public sector came under increasing scrutiny of the ICAC in the 1990's with respect to such deals. This was what the 1990 and 1998 policies were directed to.

146 There was no basis established in the evidence for the Court to intervene to assist the applicants. They had never suffered any real detriment. Sufficient notice of changes had also been given. Even if unfairness was found, no compensation should be awarded.

147 In reply, it was submitted for the applicants that the Court would not accede to the respondents' urgings, that it pay no regard to the unfairness demonstrated in the evidence. The respondents had been shown not to have adhered to their own policies, to have not revealed to the applicants the full story in relation to contributions when they were first employed and to have visited further unfairness upon them in relation to the way in which the contributions were calculated and varied over time.

148 The respondents' complaints that the cases advanced by the applicants did not adhere to the claims made in the summonses would be rejected. There had been no surprise visited upon the respondents. The fundamental claim in each case was that the applicant's remuneration had been eroded. The money sums and variations sought were foreshadowed in the summonses.

149 The full nature of the respondents' unfairness had been fully revealed in the evidence, for example in Mr Bentley's case, the parking charges imposed. This was not a case like Burgess, where new money claims or a new promise not revealed to the respondents was sought to be relied upon in final submissions. Rather, it was an illustration of what was discussed by Boland J in Gough v Gilmour Holdings v Caterpillar (No 13) [2003] NSWIRComm 26, where the issues between the parties depended upon the nature of the case which emerged at the hearing.

150 There was no complaint at the hearing that any evidence took the respondents by surprise. They had every opportunity to respond and made no application to bring further evidence, on any basis. The applicants were also cross examined as to every aspect of their evidence. The respondents had also now fully answered the case in their submissions, except for two issues, namely the imposition of the car parking charge and the result of the 1998 policy, that the applicants pay part of the respondents' running costs. This did not result from any surprise, but because those aspects of the policy which the respondents had devised were indefensible.

151 The Court could plainly not ignore that evidence. The applicants accepted that each case had to be considered in light of its own merits. The evidence showed however, that the cases had some common elements.

152 The evidence showed that the circumstances each fell into the type of situation described in Westfield Holdings v Adams (2002) 114 IR 241 at p251: '… if the respondent employer had taken reasonable care in negotiating and explaining the terms of the contract with an employee and had given more attention to ensuring an understanding and acceptance by the employee of the specifics of the arrangements to apply upon the various circumstances under which separation may occur, the employer could have avoided the consequences of what otherwise was found to have been unfair.'

153 The benefit here in question was a fundamental aspect in each of the applicants' contracts. The right to unilaterally vary the cost of the benefit had led the employer to reduce the salary paid, at its discretion and on a basis that it saw fit. This was demonstrably unfair. No semantics could disguise the result. In Mr Hornshaw's case, for example, it was that while his salary had increased by 18% since his employment, the amount deducted from his salary had increased by 184%. In these circumstances unfairness could not be tested by reference to the assertion that the car was provided at 'a very cheap price'.

154 As to the repeated assertion that the applicants were free to give the car back, it was submitted that the cars were held out to the applicants as a part of their remuneration, as Mr Barker had accepted in his evidence. Return of the cars should not be forced upon the applicants as the result of the way in which the respondents had increased the contribution rate. This amounted to 'naked financial pressure'.

155 The involvement of the unions did not entitle the respondents to presume that they were representing the applicants, especially when they were expressly aware of the applicants' opposition to what was proposed. The policies in question, in any event, concerned individual contracts and required individual agreements. The negotiations with the unions could not override these provisions. Nor could the significant differential between the parties to these contracts, in relation to their bargaining power, be overlooked.

156 Detailed submissions were made as to the evidence, which again I do not detail. As to the relief sought, it was submitted that Mitchforce did not suggest that the Court would deny an applicant a remedy when unfairness was established, especially if, as here, a financial effect of the unfairness was established on the evidence. As in Brown v Rezitis (1970) 127 CLR 157 at 164, the discretion should be exercised for the purpose of restitution and remedial provision.

157 The fact that the cars were tax payer funded was not a basis for perpetuating unfairness upon an employee, especially where the evidence showed that only so many cars as necessary for the respondents' use were acquired and none were acquired at taxpayer's expense, so as to allow employees to drive them. That it would cost an employee more to purchase a car than the costs flowing from the 1998 policy, was irrelevant to the question of relief. The spring for relief was the way in which these contracts had operated, so as to erode the applicants' remuneration.

158 This was the heart of the complaint and the unfairness established, as contemplated by s105 of the Act. The unfairness demonstrated warrants remedy.

159 Final submissions were put in writing for the applicants. There, further detailed submissions put as to the position of individual applicants, in response to further rewritten submissions which had been put for the respondents. It was also argued that the respondents had made the 1990 policy a contractual term. The 1998 policy introduced an entirely new and differently based contractual term, removing benefits such as the respondents bearing the cost of annual registration, insurance, maintenance and running costs. The discretion to increase rates in the 1990 policy could only relate to increases in the rates fixed under the framework there adopted. There was no discretion to abandon the whole basis upon which those rates were fixed. The discretion was a limited one. The 1998 policy effected changes outside that discretion. The changes were fundamental, unilaterally imposed and abandoned the contractual promises made in the 1990 policy as to the basis of the charges, to the applicants' detriment. The Court could not ignore that evidence.

160 I am well satisfied on the evidence led in these cases, that unfairness was clearly demonstrated. Apart from one aspect of the money orders pressed, I am satisfied that these were not cases where there has been some departure from the complaints advanced, or the relief sought in the summonses, which could not properly be permitted without leave to amend being sought and granted, having in mind the approach of the Full Court in cases such as Bourke and the authorities there referred to.

161 I am satisfied however, that the claim advanced in final submissions, for the first time in Mr Crocker's case, that he should recover all contributions made during his employment for use of the car, (in the order of some $19,000), is not a claim which could properly be so advanced and do not grant leave to amend his summons in that respect.

162 I am satisfied however, that other aspects of the unfairness complained about by the applicants in their submissions were clearly revealed in the evidence, consistently with the claims advanced in their summonses. This was not a matter about which any complaint could properly be made by the respondents.

163 The evidence as to the operation of the 1998 policy, which showed that at least one of the applicants, Mr Bentley was having deductions made from his salary, when he complied with the respondents' requirement that the vehicle be parked at work, so as to be available for use by the respondents for their business purposes, came initially from the applicant in cross examination and was then explained by Mr Barker in his evidence. Deductions for such charges are made by the respondents from employees' salaries, either for charges which an Area Health Service itself imposes upon those who wish to park at its premises, for commercial considerations, or for charges made by private contractors, with whom an Area Health Service has entered agreements, again for commercial reasons. The unfairness of such an impost upon the applicants was stark.

164 Likewise, the explanation as to how the calculations have been made for the over and under 15,000 kilometre rates imposed by the 1998 policy, came from Mr Barker. This was not information within the applicants' possession. Mr Barker's explanation plainly revealed that under the policy, the applicants could be paying some of the respondents' running costs for business use of their vehicles. Contrary to the respondents' submissions, that this had not been demonstrated in any particular case, in Mr Crocker's case, for example, he had estimated that his private use of the car was 12,900 kilometres per annum with 5,000 kilometres business use, yet he was paying the 15,000 kilometre rate. Mr Driver was compelled to under 15,000 kilometres use, because once he got over that mileage, the cost became too high. The inference was that this resulted, in part at least, because he was then obliged to pay for 25,000 kilometres use, whether or not he travelled such a distance.

165 The administrative reasons underpinning the mechanism selected in the 1998 policy may have been understandable, as Mr Barker explained it and in the context that the unions and the respondents were negotiating an overall arrangement for great numbers of employees, including those employed in future. Those negotiations took place against a background where the respondents had already unilaterally decided to impose much higher charges upon employees and the unions were seeking to move them away from that decision. That an average approach, which avoided laborious record keeping, had certain attractions, is understandable. Nevertheless, one problem revealed in these proceedings, was that it resulted in the imposition of inappropriate and unfair charges, in the event of private travel of less than 15,000 kilometres, or less than 25,000. This was because the costs incurred by the respondents for business use of the vehicle, were then paid by the employee.

166 Mr Barker also explained that after consultation with the unions, contrary to what was first proposed in late 1997, the respondents had accepted that the new basis of the charges which the respondents proposed to introduce, should have no regard to the costs of acquisition of the vehicle. This was because that was a cost which the respondents would incur, irrespective of whether or not the vehicles were used by employees for private use. This was an acceptance quite different from what the respondents had earlier proposed to implement, without prior notice or consultation with affected employees or the unions. The result of industrial pressure and the proceedings before the Commission, was that this change was not implemented by the respondents and discussions ensued with the unions, which led to the 1998 policy.

167 Had the respondents adhered to their earlier approach, it is difficult to see that an infringement of the provisions of Part 10, Payment of Remuneration, of Chapter 2 of the Act would not have resulted. Whether any consideration was given in the negotiations to the requirements there imposed, was not revealed on the evidence. Section 121(2) of the Act, however, provides that a contract that provides for 'payment of remuneration to an employee in a manner that is contrary to this Part', is void.

168 The respondents relied upon the agreement which they reached with the unions, to demonstrate the fairness of the 1998 policy. It was not submitted that the agreement was one which fell within s118(2) of the Act. As earlier noted, what the agreement precisely was, was not entirely clear on the evidence. In any event, the question which arose for consideration in these proceedings, was the fairness of the 1990 and 1998 policies, given the applicants' contracts of employment.

169 The evidence showed that the respondents were well aware that the applicants did not agree with what was proposed in the 1998 policy. Despite this, there was no consultation with them, before the 1998 policy was applied to them. The evidence does not permit the conclusion that any agreement then reached with the unions, including the HREA, of which three of the applicants, other than Mr Crocker and Mr Hornshaw, were members, resulted in any variation to the applicants' contracts, so as to import the terms of the 1998 policy. At best, the evidence could have permitted the conclusion that the contracts incorporated the 1990 policy and that the respondents unilaterally varied the contracts, so as to introduce the 1998 policy.

170 Even were a contrary conclusion available on the evidence, the fairness of the resulting contract would remain for consideration.

171 The respondents also relied upon s115 of the Health Services Act 1997 to support various of their submissions, as to the fairness of the applicants' contracts. The section provides: 115. Determination of conditions of employment of staff (cf AHS Act s 26, PH Act s 40BA)

(1) Definitions In this section, enterprise agreement and industrial matters have the same meanings as in the Industrial Relations Act 1996 .

(2) Conditions of employment Except in so far as provision is otherwise made by law, the conditions of employment (including salaries, wages or remuneration) of the employees in the NSW Health Service are to be as may be determined from time to time by the Health Administration Corporation.

(3) Corporation is taken to be employer for certain purposes The Health Administration Corporation: (a) is, for the purpose of making any determination under subsection (2), taken to be the employer of the employees in the NSW Health Service, and (b) is, for the purpose of entering into an enterprise agreement relating to the enterprise carried on by a public health organisation, taken to be the employer of the employees of the organisation concerned, and (c) is, for the purpose of any proceedings before a competent tribunal having power to deal with industrial matters, taken to be the employer of the employees in the NSW Health Service.

(4) Corporation may delegate functions To remove any doubt, the Health Administration Corporation may, in accordance with section 21 of the Health Administration Act 1982, delegate its functions as such an employer.

(5) Corporation may enter industrial agreements The Health Administration Corporation may enter into an agreement (not being an enterprise agreement taken to have been entered into by the Corporation under subsection (3) (b)) with any association or organisation representing any group or class of employees in the NSW Health Service with respect to the conditions of employment (including salaries, wages or remuneration) of that group or class. Any such agreement may (subject to Part 2) extend to conditions in respect of the employment of persons convicted of, or charged with, serious sex or violence offences.

(6) Industrial agreements bind employees An agreement referred to in subsection (5) binds all employees in the group or class affected by the agreement and no such employee, whether a member of the association or organisation with which the agreement was entered into or not, has any right of appeal against the terms of the agreement.

(7) Actual employers bound by industrial agreements A public health organisation must give effect to: (a) any determination made by the Health Administration Corporation under subsection (2), and (b) any enterprise agreement referred to in subsection (3), and (c) any order or determination made by a competent tribunal in proceedings referred to in subsection (3), and (d) any agreement referred to in subsection (5).

(8) Corporation taken to be employer only for certain purposes Nothing in this section authorises: (a) the Health Administration Corporation to act as an employer, or (b) any function to be exercised by or in relation to the Health Administration Corporation, otherwise than for the purposes of and in accordance with this section.

(9) Application to chief executive officers and other senior executives This section does not apply to any conditions of employment determined under Part 2A of the Public Sector Management Act 1988 of: (a) the chief executive officer of an area health service, or (b) the chief executive officer of a statutory health corporation whose employment is subject to that Part, or (c) any other employee of a public health organisation whose employment is subject to that Part.

172 While agreements which the HAC enters with a union bind 'all employees in the group or class affected by the agreement', (s115(6)), the respondents did not demonstrate that the 1998 policy was such an agreement. The terms of the agreement reached with the unions as to that policy were not in evidence. The evidence also suggested that the policy had been later altered by the HAC. There was no evidence that this was as the result of any further agreement with any unions. Even if the policy were such an agreement, so that the applicants have 'no right to appeal against the terms of the agreement', I am satisfied that these proceedings do not encompass such an 'appeal'.

173 There was no suggestion in these proceedings that s115 detracts from common law notions that those whom the respondents employ, are employed pursuant to a contract of employment. To the contrary, s33 of the Health Services Act 1997 empowers Area Health Services to appoint and employ employees such as the applicants. Section 37 empowers them to enter into contracts or agreements with any person for the performance of services. In doing so, an Area Health Service is undoubtedly obliged to have regard to conditions of employment determined by the HAC for its employees from time to time to, as well as agreements HAC has entered into with a union (see s115 (7)). Nothing in s115, however, suggests that the fairness of any contract which is entered into with an employee may not arise for consideration under s106 of the Act. (See s404 of the Act.) This is what is sought to be addressed in these proceedings - the alleged unfairness of each applicants' contract of employment.

174 The HAC is empowered to 'determine' the conditions of employment of employees such as the applicants (s115(2)). The evidence did not show that the 1998 policy had resulted from any HAC determination. Even if it had, such conditions may be fixed 'except in so far as provision is otherwise made by law'. It follows that a determination could not be made inconsistently with the various requirements of the Act, or of an order or award made by the Commission under the Act, or of an order made by the Court, in proceedings such as this.

175 I turn then to the complaints which the applicants advanced as to the unfairness of the deductions made from their salaries by the respondents, in relation to their private use of the respondents' vehicles. Given the evidence of the basis upon which the applicants were recruited for employment, the terms of their contracts of employment and the way in which the respondents exercised their discretions under the 1990 and 1998 policies as earlier noted, the only conclusion available is that the necessary unfairness has been demonstrated and that relief must flow to the applicants as a result.

176 In each case the evidence showed that the applicant was recruited on the basis that he would receive a salary, superannuation and private use of a vehicle owned by the respondents. In Mr Gillies' case, he was entitled to private use of the car, without charge, to drive to and from work. Mr Driver was in the same position. This plainly formed a term of the contract of employment which they each entered with their employer and formed a part of their total remuneration package. Mr Gillies had also been promised that the provision of full private use of the car would be investigated after his employment. Both he and Mr Driver later accepted full private use of their vehicle, subject to the terms of the 1990 policy. The result was that their contracts were so varied, by agreement. Prior to that point, the 1990 policy did not apply to them. The result of its application was not to remove their contractual right to the benefit of private use of a car, as was implicit in the respondents' submissions.

177 Mr Hornshaw was recruited on the basis that he would have full private use of a car, at the rate of about $12 per week. After acceptance he was informed that the rate was about $25 per fortnight, but it in fact turned out to be over $50. The evidence did not permit the conclusion that the terms of the 1990 policy were revealed to him, so as to form a part of his employment contract upon commencement. Nevertheless, in practice, he later accepted its application, feeling he was powerless to do otherwise. The result was that thereby, the 1990 policy became a contractual term.

178 Mr Bentley was also recruited on the basis that he would have full private use of a car, but with contributions to be made at the rates provided in the 1990 policy. This recruitment occurred at a time when it was known that the policy was under review and Mr Bentley was assured that the rates would not increase substantially and that if they did, other arrangements would be made for him. Like Mr Driver, this was important in Mr Bentley's case because of the distance he had to travel to work, if he accepted the job offered. The Area was anxious to give him the necessary assurances as to provision of a motor vehicle, so as to attract him to the position he was being offered.

179 The 1990 policy plainly formed a part of his contract. I accept Mr Bentley's evidence as to the assurances which he received, as I do the evidence of the other witnesses. They were each entitled to expect that the assurances and representations made to them, were honoured by the respondents.

180 While it was submitted for the respondents that those who made the representations to the various applicants had no authority to do so, the evidence showed that the ability to offer private use of a motor vehicle was successfully being used by the respondents as a recruiting tool. On the evidence this was well known to the HAC. It seems to me that the respondents cannot now, as a matter of fairness, successfully argue that those making the representations had not authority to do so. On Mr Barker's evidence, the whole purpose of developing the 1990 policy was to regulate, on a new basis, the way in which different Area Health Services made these offers, because the HAC was aware of the different approaches being pursued.

181 That decision cannot make completely irrelevant the promises being made to potential employees like the applicants, in order to attract them to the respondents' employ. Nor is it sufficient to simply dismiss the fact that in 1997, Mr Crocker, for example, responded to an advertisement for a position, the remuneration for which included free private use of a car, which he was later offered and accepted, as having simply involved a mistake, which was soon rectified. It was a mistake which on the evidence has cost Mr Crocker some $19,000 in the interim, of which the respondents have had the benefit.

182 It was also submitted for the respondents that they had the right to unilaterally vary the 1990 policy, so long as sufficient notice was given. The policy itself does not contain such a provision. Nor does it permit the respondents to remove the benefit of provision of a car to which the applicants were entitled. The respondents also argued that the HAC was free to vary the 1990 policy, entirely as a matter of its discretion.

183 There is little doubt as to the common law position in relation to variation of a contract. Parties are free to agree to vary their contracts. Neither party has the right to unilaterally vary any contractual term, unless that be a right which the contract confers. An attempt to force a unilateral variation upon the other contracting party, for example where an employer seeks to reduce an employee's remuneration, involves a breach of the contract, likely to amount to repudiation. It also gives the other party the right to regard the contract at an end and to sue for damages. (See for example, the discussion in Law of Employment, Fifth Edition, Macken, O'Grady, Sappideen and Warburton at 249.)

184 A question which thus must be determined, is whether a particular contract entitles the party to change particular terms. There are plenty of contractual terms in employment contracts, which permit an employer to make changes. Such a right often exists in contracts where it is agreed that an employer's policies are to become contractual terms. In such cases, however, there are still limits upon how an employer might exercise such a right.

185 For example, in Riverwood International Australia Pty Ltd v McCormick (2000) 177 ALR 193, the Full Federal Court was considering a written contract which incorporated the employer's policies and practices, as contained in a human resources manual. The employer varied those policies from time to time, but later failed to apply to the employee, the terms of its redundancy policy, as current at the time of termination of the employment. At p223, Mansfield J considered the employer's power to alter its policies from time to time, under the contract, observing at [152]: 'Its power to change its policies, or to introduce new policies, from time to time would be constrained by an implied term that it would act with due regard for the purposes of the contract of employment: eg Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 at 63, 137-138; 55 ALR 17, so it could not act capriciously, and arguably could not act unfairly towards the respondent: cf. Ansett Transport Industries (Operations) Pty Ltd v Commonwealth (1977) 139 CLR 54 at 61; 17 ALR 513. It might also be a power which, by implication, must be exercised reasonably having regard to the nature of the contract and the entitlements which exist under it: Renard Constructions (ME) Pty Ltd v Minister for Public Works (1992) 26 NSWLR 234 at 279-80 per Handley JA.'

186 Lindgren J took a different approach, observing at p214 in [111] that : 'In any event, the purported agreement to abide by alterations or additions to the policies and practices of Riverwood did not create a legally binding obligation on Mr McCormick to accept any unilateral alteration or addition. A purported agreement which leaves the content of the agreement entirely at the discretion of one party is not contractual in nature. Any alteration or addition to the company policies and practices could only achieve binding contractual effect if there was separate agreement to such alterations or additions, either by way of variation of the existing agreement or by way of entering into a new agreement.'

187 Here, the respondents also asserted a right to unilaterally vary the 1990 policy, upon the giving of notice of the length required to terminate the contract. As I have noted, the 1990 policy itself contained no such provision. While the Director General reserved the right to determine the minimum contribution rate annually, the right to entirely alter the basis of the policy was not reserved. No authority was cited to support the submission that such a right exists at common law. The idea is discussed by the authors of Labour law Text and Materials (Second Edition Creighton Ford and Mitchell) at [5.62], where it is noted that this approach has been rejected in various English decisions. For example in Rigby v Ferodo Ltd (1998) ICR 29 it was observed at p33, by Lord Olivier of Almyrton: 'Before considering the primary contention upon which the appellant bases its case, I ought to notice briefly a submission made both to the trial judge and to the Court of Appeal and rejected by both. It is common ground that the unilateral imposition by an employer of a reduction in the agreed remuneration of an employee constitutes a fundamental and repudiatory breach of the contract of employment which, if accepted by the employee, would terminate the contract forthwith. It is submitted, however, that it also constituted - at least in the circumstances of this case - the giving of the necessary 12 weeks notice require under the contract to terminate the employment. My Lords, even if this were capable of being sustained as an abstract proposition of law, which I doubt, it appears to me to be a quite impossible contention on the facts of this case. The appellant never purported to give such a notice and would, I venture to think, have been both astonished and discomfited if anyone had contended at the time that it had. The one thing that the appellant was concerned to do was to retain its employees in its employment and, as the trial judge trenchantly observed, the deliberate implementation of a policy preferred over others in order to keep the whole workforce in work cannot sensibly be construed as evincing an intention to terminate the contract of service.'

188 Likewise in Burdett-Coutts and Ors v Hertfordshire County Council [1984] IRLR 92, Justice Kenneth Jones rejected the argument that a letter purporting to reduce an employee's pay, had amounted to a notice of termination of the employment and an offer to employ on new terms. Rather, at [11] it was held that: 'What is the position? In my judgment the defendants have sought unilaterally to impose amendments to the contracts of employment here. By so doing they are in breach of those contracts and have repudiated them. The plaintiff, faced with the choice which every innocent party to a contract has, had not accepted that repudiation but is standing on the original contract and saying, as she is entitled to say, 'I can now recover the total wages which should have been paid to me under the original contract'.

189 Here, there was no evidence from which it could be concluded that the respondents were intending to bring the applicants' employment to an end and to offer them terms on the new basis comprised in the 1998 policy. Even if the 1990 policy had not formed a part of each applicants' contract, questions of fairness of those contracts, which permitted unilateral variation of the 1990 policy, would still arise.

190 Mr Barker's evidence confirmed that the HAC was aware that some Area Health Services had entered into contracts with employees, inconsistent with the provisions of the 1990 policy. Mr Barker expected that internal audits of compliance with such policies would pick up such cases, so that they could be dealt with. The evidence does not permit the conclusion that this always occurred, or that as a result, such persons would have had no choice, but to accept the unilateral application of the policy to them. Mr Crocker, of course, felt that he had no choice, but to accept its imposition. The requirement that employees be made aware of the terms of the policy, acknowledge its acceptance in writing and provide written authorization for payroll deductions, were obviously important aspects of the 1990 policy, as a matter of fairness, as Mr Barker accepted. The respondents' procedures plainly did not ensure adherence to these requirements.

191 Mr Crocker's evidence was that he was recruited to a position in which he was entitled to full private use of a car, without charge. This was plainly a term of his contract. After his employment commenced, he was informed that a mistake had been made and that he would have to make a contribution of some $618 per year. He felt that he had no choice but to accept what he had been told. The contract was so varied, but not so as to incorporate the terms of the 1990 policy, which were not revealed to Mr Crocker until later, when he, too, was forced to accept its terms. As a result, he too, was forced to accept the increases which flowed from that policy. It was not until this point, that a variation to his contract resulted, so as to incorporate the 1990 policy.

192 While Mr Crocker, like the other applicants, was later also forced to accept what flowed from the 1998 policy when it introduced further substantial increases, the evidence did not permit the conclusion that any of the applicants' contracts was thereby varied to incorporate the 1998 policy. They each resisted its imposition. Some drew the matter to the HREA's attention. Some sought to intervene in the proceedings before the Commission. Each initiated these proceedings. The unfairness of each applicant's position at that point was stark.

193 I turn then to the complaints as to the amount of the car contributions imposed under the 1998 policy. As Mr Barker accepted in his evidence and as the respondents submitted, private use of a vehicle was a substantial benefit for each applicant. They were each contractually entitled to the use of a car. While the 1990 policy made it clear that such a car was to be provided from the existing fleet, and that the respondents were not obliged to acquire an additional car for the applicants' use, there is no doubt that under the applicants' contracts, the respondents were obliged to provide each of the applicants with a car.

194 It is plainly no answer to the complaints of unfairness which were advanced in relation to the increasing contributions which the respondents required the applicants to make for such private use over time, that the employees were always free to forego their access to the benefit. If the respondents had offered to provide something to the applicants by way of compensation in such a circumstance, the matter might have been different. There was, however, no such offer and the respondents acted at all times as if they had not attracted the applicants to their employment, in part by the offer of the benefit, which when accepted, became a part of the remuneration package to which the employees were entitled under their contracts of employment.

195 Private use of a motor vehicle is a very common feature of employment nowadays, especially among more senior employees and increasingly, for more junior employees. Salary sacrifice arrangements have also become common. Mr Barker's evidence put in context why it was a benefit which the respondents commenced offering over time. The vehicles were acquired because the respondents required employees to drive them, in the course of their work. Individual Area Health Services found that it helped them to attract staff and also provided more security and better care for the respondents' vehicles, to give employees access to private use, rather than they being left unattended out of hours, in the respondents' compounds.

196 Mr Barker also explained that concerns arose over time amongst the respondents as to the uniformity of benefits being offered to employees. Comparisons were being made by the respondents with the private use of cars being offered in the public sector to the members of the SES. On the evidence, SES officers are generally more highly paid than other public sector employees and in some cases, significantly so. They had access to private use of vehicles, on a salary sacrifice basis. A concern arose that some lower paid employees had access to private use of cars on a no cost basis, which was not available for SES officers. The 1990 policy had regard to these matters, in fixing contribution rates at 3 levels, having regard to salary. The policy also seemingly had regard to the fact that this employment occurred in the public sector and there was a concern to ensure that employees were obliged to make some contribution to the cost of their private use of tax payer funded cars.

197 While there was reference in the respondents' submissions to ICAC scrutiny of the public sector increasing over time, the evidence did not show that this had any relevance to the introduction of the 1990 policy, the way in which it was altered over time, or the basis upon which the 1998 policy was introduced. Rather, the evidence suggested that the changes were driven by economic considerations, as well as because of continuing comparisons being made with SES officers. The evidence did not show any basis for a concern that there was anything inappropriate in the 1990 policy, which might have given rise to concerns by the ICAC.

198 As Mr Barker explained, the 1990 policy also required the applicants to authorise deductions from their pay. This requirement was consistent with the provisions of s118 of the Act, which regulates such deductions.

199 On the evidence, this requirement was not strictly adhered to and the deduction forms did not all permit the Director General to unilaterally vary the amount of the deduction made from time to time, in accordance with the provisions of the 1990 policy. The evidence showed that the applicants were not all aware of the terms of the policy before the deductions were authorised. Even when they were, the policy did not reveal the basis upon which the contributions had been calculated and did not require the Director General to consult with the applicants, or to advise them prior to altering the amount of the contributions and increasing the amount of the deductions made from the applicants' salary. Nor was there an obligation falling upon the Director General to advise the applicants of the basis upon which any increase was made, even after the deductions had been increased. Some obvious difficulties resulted potentially and in fact, as a result.

200 As I have noted, the authorities show that there are many contractual conditions of employment, as well as non-contractual policies, under which employers reserve to themselves discretions of various kinds. There is nothing intrinsically unfair about such an approach, although obvious risks arise under s106 of the Act, if such a discretion is exercised unfairly. In a case where the employers' discretion relates to deductions made from an employees' wages or salary, other considerations must also arise for the employer, having regard to the limitations imposed by Part 10 of Chapter 2 of the Act, upon deductions which may be made from an employees' salary.

201 Here, the evidence showed that the deductions under the 1990 policy were adjusted from time to time by the Director General, having regard to CPI movements and charges made in respect of SES officers. The basis for the latter approach was quite unclear on the evidence. The 1990 policy, after all, fixed three levels of contribution, having regard to three levels of salary. SES officers were paid higher salaries. In 1996 the three level charges were reduced to two. I am not satisfied that the adjustment so made was fair, particularly in those cases where recruitment in the first instance had proceeded on the basis of an offer that the applicants could have private use of a car, without any charge at all. The three level charges were established in the first instance, by having regard to how SES offices were treated and so as to ensure employees made a contribution to car use. What changed so as to warrant this alteration, was not revealed.

202 It is convenient at this point to observe that there are significant differences between salary sacrifice arrangements and deductions made by an employer from an employee's salary. Deductions are made from the salary which an employer is obliged to pay an employee, once it is earned. A salary sacrifice involves an employee choosing to sacrifice a part of the salary, before it is earned and instead, to receive a benefit. The amount of the sacrifice depends upon the benefit which the employee chooses and how the value of that benefit has been costed by the employer. The employee is then remunerated by the employer paying the salary and providing the benefit. Salary sacrifice arrangements are provided for in industrial instruments made under the Act. Whether that is so in the case of the applicants, was not clear on the evidence.

203 On Mr Barker's evidence, salary sacrifice arrangements have now been made available by the respondents to non SES employees. The benefits available include private running costs of a motor vehicle. As Mr. Barker explained it, an employee would not rationally reject such an arrangement once available, because it is financially advantageous to the employee to opt for running costs under a salary sacrifice arrangement, rather than as a deduction from salary. Given Mr Barker's explanation of how the respondents have costed that benefit, it appears to involve benefits for the respondents as well, if chosen by the employee. The evidence did not enable more detailed comparisons to be drawn between the two approaches, from the applicants' point of view. The inference from the evidence was, however, that the comparisons which the respondents had made between the deductions made in respect of employees such as the applicants in relation to running costs and the salary sacrifices which SES officers chose for such costs, involved quite a number of considerations, not all of which were explored in the evidence.

204 It follows that the reduction in the number of levels in the 1990 policy from three to two, which had regard to comparisons drawn in 1996 with the way in which SES officers were treated, did not involve a straightforward exercise. Nor was the reason for it explained on the evidence. Given that the 1990 scheme initially involved three levels, devised after the comparisons then drawn with SES officers, it can only be concluded that the change was not a fair one, from the applicant's point of view. The evidence showed that the result was that higher deductions were made by the respondents from employees' salaries, for their private car use, thereby reducing an employees' salary and increasing the economic return for the respondents, in respect of the provision of that benefit. The change did not reflect the increasing cost to the respondent of the provision of the benefit, which was being accommodated by CPI adjustments made from time to time. While fairness could accommodate the latter adjustment, it could not do so in the case of the former.

205 Each of the applicants' circumstances, of course differed. I accept, however, that the applicants each had little option but to accept what they were confronted with in the 1990 policy and how it was operated. Were that the only basis of complaint in these proceedings, I would, nevertheless, have hesitated before exercising any discretion in favour of the applicants, given the evidence as to the applicants' acceptance of the basis of the charges imposed and the absence of significant complaint over time, given the level of the contributions they were required to make and the gradual adjustments made over time to the rates. Each applicant accepted that the small, or nominal, contributions required under the 1990 policy, as increased from time to time was reasonable, with the exception of Mr Crocker. I have already dealt with the late alteration in his position.

206 The imposition of the 1998 policy did not, however, properly leave such an approach to the exercise of the discretion open. Having been requiring the applicants to make contributions on the basis underpinning the 1990 policy, that the respondents then unilaterally decided to abandon entirely the salary based contribution and move to recover from the applicants the running costs of their private use of the car, visited an obvious unfairness upon the applicants. Again, the 1990 policy did not reserve to the respondents the right to so alter the policy. The economic basis of the decision was plain from the evidence. It, undoubtedly, resulted in a reduction of the total benefits to which the applicants were entitled under their contracts and increased what the respondents received from the applicants for the private use of the cars to which they were contractually entitled. I am satisfied that a unilateral reduction by an employer such as the respondent, of an employees' contractual entitlement to a valuable benefit, for such reasons, can only result in the most obvious unfairness.

207 The respondents urged that even if this view were reached, the Commission would accept that at best, the applicants were entitled to be given notice of the removal of the benefits flowing from the 1990 policy and the introduction of the 1998 policy. They also submitted that the withdrawal of the 1997 idea, that the respondents would require employees to make a contribution to the total cost of the vehicle, including its acquisition, and the phasing in of the introduction of the 1998 policy, which required contributions only to the running costs of the private use of the vehicle, would lead to the conclusion that the applicants had received sufficient notice of the termination of the 1990 policy, so as to address any unfairness found. For reasons earlier outlined, that submission cannot be accepted.

208 The evidence showed, as I have said, that economic considerations motivated the new approach adopted. I am not of the view that there is anything inherently unfair in the respondents having regard to the economic costs of the benefits of the employment which they offer. Were the 1998 policy to have applied, for example to those newly recruited to the public sector, who were made aware of and accepted employment on that basis, a finding of unfairness could not so readily have been arrived at, although other questions of compliance with the requirements of the Act might arise. To impose the new policy unilaterally upon the applicants and over their objections however, in the circumstances demonstrated, beyond doubt, that the contracts in question were unfair, as that term is defined in s105 of the Act.

209 While the applicants were plainly put on notice that the respondents proposed to introduce change, what the change was to be, only became clear when the 1998 policy was implemented. The result was a unilateral move from a nominal charge based on salary, to one involving recovery of running costs. The resulting increase in the amount of the deductions made from the applicants' salaries was substantial, even though by comparison to the cost for an employee him, or herself, acquiring and running a car, it was still cheap. That, in my view, is not the correct way of approaching the question of whether unfairness resulted. That question must be determined having regard to the benefit to which the applicants were entitled under their contracts prior to the 1998 policy and what the respondents required them to pay, if they wished to continue availing themselves of that benefit, under the 1998 policy.

210 The respondents' submissions as to the amount of the charges made, having regard to the way in which the applicants' salaries had increased over time, also provided no answer to this unfairness. The salary component of the applicants' remuneration packages increased over time for reasons connected with wage movements in awards and other instruments, as well as the positions to which the applicants were appointed and the work which they performed. Those increases were entirely irrelevant to the amount of the contributions required of the applicants under the 1998 policy, which was entirely cost driven, albeit by reference to the charge made of SES officers, on a salary sacrifice basis, for a particular sized vehicle. The result was that the evidence as to the way in which each applicant's salary had increased over time, compared to the way in which the amount of the deductions had increased, showed a marked and unfair disparity. This followed even if a comparison of the deductions taken as a percentage of salary resulted in the view that the percentage increases had not been great. In my view, this latter way of looking at the increases was not one which fairness would permit, given the evidence in this case.

211 I am also satisfied that the evidence showed that the lack of notice of the removal of the benefits flowing from the 1990 policy, worked an obvious unfairness on the applicants, given the very substantial size of the increases introduced. It is of some relevance that they were so substantial, that the respondents themselves finally accepted that they had to be phased in.

212 I turn to consider the complaints advanced by the applicants that the deductions made under the 1998 policy unfairly reduced their salaries. These complaints revolved around the unfairness of a cost based deduction, having in mind the basis upon which they were recruited and the basis of the 1990 policy. Complaints were also made as to the way in which the deductions were calculated, having regard to the under and over 15,000 kilometre charges and the requirement that car parking be paid for, in some cases.

213 Mr Barker's evidence showed that those using a vehicle for less than 15,000 kilometres private use, would pay for more than the use which they made of their vehicle, as would those who travelled privately more than 15,000 kilometres, but less than 25,000. Mr Driver's evidence and that of Mr Crocker, for example, put the unfairness of this aspect of the operation of the policy beyond any doubt, as I earlier noted. The evidence as to the requirement that parking charges be paid when a car was brought to work to be available for the respondents' business use of the vehicle, but further confirmed these conclusions. It is also difficult to see that these deductions could be made consistently with the provisions of ss117, 118 and 119 of the Act, although it is unnecessary to decide this point, in these proceedings.

214 This aspect of the evidence also demonstrated that an inference that the 1998 policy was fair, could not flow from the fact that the respondents had reached agreement with the unions as to the policy. While undoubtedly a relevant matter, as Mr Kimber also put forcefully in submissions, it could not preclude consideration of the operation of the policy, to test the allegation that it was unfair. (See the approach of Hill J in Newton v Goodman Fielder Mills Ltd (1997) 81 IR 227.)

215 The respondents also relied upon the decision of the Full Bench of the Commission in New South Wales Nurses' Association v South Western Sydney Area Health Service (1994) NSWIRComm 147. There at issue before the Full Bench was an appeal from a decision of Commissioner French, who had been dealing with a dispute about the imposition of car parking fees at Liverpool Hospital. There had been a practice at the hospital that employees had free access to car parking. With the redevelopment of the hospital and the building of a new multistorey car park, it was proposed to introduce parking fees.

216 There was no suggestion in those proceedings that free car parking was a term of any employee's contract of employment or that the employer was requiring any employee to park at the hospital. The Full Bench observed that such practices, like terms and conditions of a contract of employment, were ultimately subject to any order or award made by the Commission. Where a dispute arose as to a change in a practice, one factor which arose for consideration was whether the practice amounted to a usage, although even this was not determinative of the exercise of the Commission's discretion. On the facts the Full Bench concluded that the hospital should be permitted to discontinue the former practice, upon certain terms as to notice and availability of car spaces for particular employees, who had formerly had the benefit of the practice.

217 The circumstances here under consideration were quite different. What was at issue was the unilateral variation of contractual terms, so as to recoup the cost of the provision of a contractual benefit, to the employees who were entitled to them. Consideration thus arose as to the fairness of the applicants' individual contracts of employment, which entitled them to the benefit of private use of vehicles, at certain rates. The Court is here not concerned with a change in a practice applying to employees generally, in the context of an industrial dispute seeking regulation as to the basis upon which proposed new parking charges were to be introduced. It is a unilateral alteration in certain contractual terms, which arises for consideration.

218 By way of further contrast, the question of parking fees as an aspect of the 1998 policy arose here, because under the policy employees are required to bring the vehicles to work, where they are needed for use by the applicants and other employees, in their work for the respondents. In some cases the applicants are now obliged to pay the cost of parking at their workplace, by way of deduction from their salaries. While the unions had become involved in discussions with the respondents about the terms of the 1998 policy and there had been proceedings before the Commission as a result, the upshot was not any regulation of the issues arising by an industrial instrument, or as would have been permitted, for example, under the provisions of s121(1) of the Act.

219 Given the reason for the imposition of the parking fee, as it emerged in these proceedings, when considered with the fact that under the 1998 policy, employees might be in a position where deductions are made from their salaries in respect of costs which do not relate to their private use of the vehicles at all, it is difficult to conceive that any industrial instrument, or other approval of the Commission, could permit such deductions, given the requirements of the Act.

220 Also of relevance was that the document issued by the HREA suggested that it had accepted the rates finally proposed by the HAC for the 1998 policy, because it was also agreed that car parking fees would not be imposed and that there would not be further arbitrary changes to the rates, which would remain in place, unless changed with consent. There was also a concern that if not accepted, the HAC would pursue its original approach of full recovery of costs from employees. How such deductions could be made, given the provisions of Chapter 10 of the Act is difficult to see, as I have discussed. Despite this, it appears that since then, deductions for car parking fees have been imposed by the respondents, under the 1998 policy.

221 This evidence did not permit the conclusion that the 1998 policy unilaterally so imposed by the respondents, was fair in its terms, so far as the applicants were concerned.

222 The submission that under the policy the applicants still had access to a vehicle for private use at cheap rates, or less than it would have cost them, were they to acquire their own vehicles, does not provide an answer to the unfairness demonstrated. The submission that the claims were 'ridiculous' and must be approached by the Court in the context of the 'real world', also cannot preclude the finding of unfairness which must flow, as must some monetary relief. After all, the applicants were attracted to the employment by the provisions of car use, at even cheaper rates.

223 As earlier noted, I do not accept the submission that the respondents were entitled to introduce the 1998 policy, upon appropriate notice being given. There was simply no basis upon which it could be concluded that the respondents were entitled to bring the 1990 policy to an end upon the giving of a reasonable period of notice. Even if that view be incorrect, it would not overcome the unfairness of the 1998 policy itself.

224 Car use was an important aspect of each of the applicants' contracts of employment. The respondents sought to introduce the 1998 policy, without giving the applicants any notice at all as to its terms. The end result of the approach adopted was that while the applicants were aware of negotiations ongoing as to terms of a new policy, given the respondents' desire to bring the 1990 policy to an end, they had, in reality, no notice that recovery of running costs of private use of the vehicles was to be imposed, on the basis adopted in the 1998 policy.

225 The final difficulty is the view which I have reached as to the unfairness of the terms of the 1998 policy itself. No amount of notice, or the agreement of any union can overcome the unfairness which remains in the basis upon which deductions are made under this policy, particularly by way of comparison with the 1990 policy in the cases demonstrated by these applicants. While that policy might still provide the applicants with cheaper access to a vehicle than they could obtain otherwise, it cannot be fair that the policy requires some of them to pay for more than their actual use of the vehicle. Mr Bentley was not in this position on the evidence. Nevertheless, I am satisfied, given the basis on which he was recruited for his position, that the respondents would later seek to recover from him the running costs of the significant travel involved in him reaching his workplace, was quite unfair. Similar observations can be made about the position of the other applicants. Nor is a requirement that Mr Bentley pay car parking fees for his vehicle while at work, fair.

226 The summonses claimed money orders calculated by reference to the 1990 policy, adjusted for CPI increases. There is an element of artificiality in that approach, given that on the evidence, the Director General did not increase the charges on that basis alone, under the 1990 policy. Given the view which I have reached about the fairness of the approach adopted when that did not occur, I am well satisfied that the applicants' approach encompasses an appropriate basis upon which the formulation of relief, just in the circumstances of these cases, might be approached. It is also relevant that no alternative approach was advanced by the respondents.

227 It follows that it is unnecessary to consider the other alternative relief advanced for the applicants, that compensation calculated by reference to two, or five years' pay, should be made.

228 The respondents submitted that if the view were reached, that the contracts were unfair, that there was no basis upon which any relief could be granted to the applicants, because there was no evidence upon which any variations to their contracts could be based. I do not accept that submission. On the cases which the parties respectively advanced, the proper variation to the contract is to continue the 1990 policy, adjusted by way of CPI adjustments. While the respondents submitted that this did not pay sufficient regard to the other basis upon which the Director General exercised his discretion to amend the contributions required under the policy on occasions, namely by way of the increases in the SES officers' contributions, as I have noted, the difficulty is that this was a basis of adjustment not revealed to the applicants and in my view, not fair in any event. This conclusion flows from the way in which the 1990 policy was developed, paying regard to the salaries these officers were paid by way of comparison to what SES officers were paid as well as the basis upon which charges were made to them.

229 It follows that the applicants' contracts must each be varied to require contributions according to the 1990 policy, adjusted annually having regard to CPI increases, to continue, despite the introduction of the 1998 policy. A calculation must also be done of those resulting rates and the difference between the rates so adjusted and the deductions made from each applicant's salary, under the 1998 policy. A money order in favour of each applicant must then flow. I also observe that further deductions to be made in future from each applicant's salary, in accordance with the varied contract, requires that the applicants should each give the necessary authority to the respondents permitting such deductions, having in mind the requirements of the Act earlier referred to.

230 For all of the reasons given, I find the applicants' contracts of employment unfair and direct the parties to confer on the appropriate terms of the variation to each contract and the resulting money orders, including in relation to the claim for interest, which I am satisfied must, as a matter of justice between the parties, also be encompassed in the orders made, as from the date of commencement of the 1998 policy. These orders should be filed within 28 days.

231 The usual order as to costs would be that the respondents bear the applicants' costs, as agreed or assessed. In the event that the parties are unable to agree upon the appropriate order as to costs, they have liberty to approach. That liberty should be exercised within 28 days of the date of judgment. The orders otherwise to be made should also be filed within that time. ------------------------

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